Over the top interest charged by Payday Loans
19/01/09
A leading conservative spokesman suggested that payday loan companies are charging obscene interest rates. Home doorstep firms offering loans including payday loans are charging customers over the top interest rates and in some cases as much as around 21,000 per-cent in interest.
Housing minister Grant Shapps commented, “We think it is obscene that anyone should end up paying 10,000 per cent APR, particularly when the evidence suggests that these loans are targeted at some of the most vulnerable members of our society.”
Mr Shapps found some shocking facts with interest rates on a number of loans ranging from around 12,000 per-cent to a staggering 21,000 per-cent. In some instances he found that a loan taken out of £200 was requiring £300 to be paid back after just four weeks.
The industry is worth around £3 million and with the economy in deep recession resulting in many people falling deeper and deeper in debt, consumers are unfortunately having to result to borrowing money from doorstep lenders who charge over the top interest rates.
