In my mind, these loan sharks are despicable. Preying on the vulnerable with excessive fees.
Car breaks down. A $1500 loan over 6 months attracts fees of, $300 Establishment fee.(20% of the loan amount) + $360 monthly fees(4% of the original loan, monthly)
$1500 becomes $2160 at $360/month.
Low income/welfare recipients would need to pay $180 out of their welfare check each fortnight
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'Neither a borrower nor a lender be. As someone once said and thatās been my motto.
The whole global world of finance relies on lending though.People are encouraged to buy things they canāt afford because they only have to pay back the interest( but for evermore).
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In my early years I was caught in the debt spiral. Court appearances and all that. I suppose I could blame my alcoholism to a large extent.
Since sobriety I have paid cash for everything. Not enough cash? Donāt buy it or wait until I have saved enough.
Debt free now for more than two decades.
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Apart from taking out a ten-year mortgage for my first house paid back twenty years ago and a three-month minor loan to bridge a gap eight years later, Iāve always cut my coat according to my cloth.
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Debt, if controllable and affordable, is not necessarily bad. My largest mortgage was not much less that Ā£500k and was a calculated risk. It was a good flat in London (not even the centre though) and my guess was that it would go up in value in the 10 years I planned to live there. I had no plan to pay off the mortgage completely. And 8 years ago when I did sell, even after paying off what was left of the mortgage, I made a decent profit. Much more than if Iād stayed in the suburbs house Iād sold to buy the flat. So a good result.
But I remembered that my very first mortgage went through the 17% interest rates in 1992 - at one point my property was worth 70% of what Iād paid for it and my mortgage payments were almost as much as my take home pay (closest Iāve ever considered getting a loan). So signing for the large mortgage 15 years later did make me sweat a bit.
Pay day loans? Fortunate enough that I never had to even think about one.
The only time I borrowed money was for my first and second houses. After those, I always bought outright and never borrowed again. I do lend money (actually, its given) in the form of micro-loans to struggling ladies in India. That money allows a small business to start up and when the loan is repaid, it is loaned out again to another deserving business minded lady. Itās an excellent scheme that Iāve given to for many yearsš
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Please can you share details? Iāve been wanting to help the less fortunate in India and this sounds perfect. I just want a bonefide cause to contribute too.
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I donāt have debt besides a small mortgage. I believe in living within your means.
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Take a look at this link and then that should guide you for further information
Microloans Create Opportunities for Indian Women - GlobalGiving
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That is the way of living I have impressed into my four daughters. Now they are doing the same to their children. Why pay unnecessary interest to someone youāll never meet. Now that said, the Bank of Mum & Dad has taken a right thrashing over the years 
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I have never taken a Pay Day Loan but I met a lot of people who had taken out loans of this type when I used to run a free debt advice service for a local charity.
I got together with other charity worker debt advisers to lobby the Government to cap the amount of interest and fees these āPay Day Loanā companies could charge.
They eventually listened and put a cap on both fees and interest about 10 years ago. Before then, these Pay Day Loan companies were even more of a rip-off than they are now.
I understand Australia already had a cap on this type of loan.
Although the regulated companies offering Pay Day Loans charge high fees and interest, at least they are controlled and regulated.
I wouldnāt recommend anyone to take out a PayDay Loan but itās preferable to dealing with a Loan Shark.
The real Loan Sharks are the illegal and unregulated money lenders, who still operate, taking advantage of desperate people.
They will often charge 50% interest or even ādouble bubbleā (100%) for a loan until PayDay, knowing the borrower will probably be back for more the following month. With no paperwork and everything conducted in cash, they make up their own rates and rules and they are difficult to prosecute for lack of evidence - and their customers are too scared to give evidence against them.
If you donāt make your payments, their āenforcersā donāt follow any rules either. Your car or your home may be damaged as a āreminderā to pay up - if you donāt, you or your family may get threatened with violence and beaten up if you still donāt pay.
We used to run debt advice workshops and we ran campaigns and gave out leaflets warning our clients against taking unregulated loans, spelling out they may be putting themselves and their families at risk.
The Loan Sharks didnāt like it and we received several threats about what they would do to us if we didnāt stop. It didnāt stop us trying to persuade our clients not to turn to loan sharks - seeing for ourselves how nasty they can get made us more determined to help people keep out of their clutches.
Unfortunately, the current cost of living crisis in U.K. has given these illegal Loan Sharks even more business and I hear they are taking full advantage of it.
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You can say that again! Canāt wait for it to taper off somewhat.
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How small loans and money-wise education can help some communities.
Make Women in Rural India Financially Secure - GlobalGiving
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Thank you 
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Thank goodness Iāve never needed a payday loan.
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I am convinced that those seeking such loans have never been properly āschooledā in personal finance management. Some tend to see something desired and rather than wait until they have saved up the money, they pop in for a loan and then buy what they wanted without too much thought about repaying the loan.
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The trouble with pay day loans is that they are virtually unregulated. Some charge the maximum interest rate that the law allows. They are just a step up from a pawn broker loan.
I am similar to the other posters I had one house mortgage which I paid off in about 8 years, my only other loans were on investment properties. In the 1980s when interest rates were up to 17% I also successfully invested in the short term money market.
Personally I have been fortunate enough not to need to borrow money for anything that is not an investment with a reasonable rate of return, for example I have always paid cash for my cars whether they were new or not.
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This well know high street retailer owned by Caversham Finance Ltd, was the largest retailer that operated by rent-to-own. It was almost the same as payday-loans but worse as they enticed prospective purchasers into their shops by offering ridiculous low repayments until the article was bought and paid for. Until then the customer was renting and therefore had no security of ownership until the last extortionate payment that was bordering on usuary.
It stopped trading during the first lockdown in March 2020.
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If it`s not in the bank or my purse i go without.
I saw an add recently for a loan and the interest is 99%,only fools fall for that,it should be illegal imo.
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No, I donāt enjoy debt.
But, I can understand why some people are in a debt trap. It might be circumstances beyond their control.
It can escalate quickly though.
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