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Tighter banking rules will drain £1tn from financial system,
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Linux_User
I haven't seen my friends in so long
Joined: Tue May 05, 2009 3:29 pm Posts: 7173
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A 50% annual rate will not provide a sufficient return over a short period of time.
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Tue Jul 13, 2010 6:13 pm |
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Amnesia10
Legend
Joined: Fri Apr 24, 2009 2:02 am Posts: 29240 Location: Guantanamo Bay (thanks bobbdobbs)
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Rubbish. I used to do treasury for a trader up to £3 million a night, and usually a lot less. I made fractions of a percent per night and still made a fortune for my employer. Don't forget that once repaid that money can be loaned to someone else. An interest rate of the figures you quoted are considered usury and illegal in many parts of the world. In Pakistan and India families have to sell their children into slavery to clear their debts to money lenders.
_________________Do concentrate, 007... "You are gifted. Mine is bordering on seven seconds." https://www.dropbox.com/referrals/NTg5MzczNTkhttp://astore.amazon.co.uk/wwwx404couk-21
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Tue Jul 13, 2010 6:33 pm |
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Linux_User
I haven't seen my friends in so long
Joined: Tue May 05, 2009 3:29 pm Posts: 7173
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That may well be, but in the UK as long as you're licensed by the OFT then you can lend money. Also, we're not talking about £3 million, we're talking of amount of no more than about £1,000 for no more than a few weeks. £1000 borrowed over 3 weeks with an annual interest rate of 50% gives a pre-tax return of just £28.80.
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Tue Jul 13, 2010 6:42 pm |
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Amnesia10
Legend
Joined: Fri Apr 24, 2009 2:02 am Posts: 29240 Location: Guantanamo Bay (thanks bobbdobbs)
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And all without getting out of bed. When interest rates are as low as 0.25% we are discussing a rate of interest two hundred times higher. A cap only becomes a problem when inflation is high but we are not at that point yet.
_________________Do concentrate, 007... "You are gifted. Mine is bordering on seven seconds." https://www.dropbox.com/referrals/NTg5MzczNTkhttp://astore.amazon.co.uk/wwwx404couk-21
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Tue Jul 13, 2010 7:23 pm |
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Linux_User
I haven't seen my friends in so long
Joined: Tue May 05, 2009 3:29 pm Posts: 7173
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If you don't like the rate then don't borrow. There are rules in place to stop predatory lending, and if you ban these "Pay Day" loan providers then you're just forcing people into the arms of loan sharks and criminals.
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Tue Jul 13, 2010 7:37 pm |
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Amnesia10
Legend
Joined: Fri Apr 24, 2009 2:02 am Posts: 29240 Location: Guantanamo Bay (thanks bobbdobbs)
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The fact that pay day loans even have a market is a serious sign of problems building. The rates demanded by these companies are no different from loan sharks and criminals. You really need to look at why these people are borrowing? If poverty is an issue that should shame all of you in that it forces people into the hands of loan sharks.
_________________Do concentrate, 007... "You are gifted. Mine is bordering on seven seconds." https://www.dropbox.com/referrals/NTg5MzczNTkhttp://astore.amazon.co.uk/wwwx404couk-21
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Tue Jul 13, 2010 9:28 pm |
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Linux_User
I haven't seen my friends in so long
Joined: Tue May 05, 2009 3:29 pm Posts: 7173
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Except these lenders aren't going to break your legs if you can't afford the repayments. These companies exist because sometimes people have cashflow shortfalls. I've extended my overdraft before to cover a short-term cash shortfall, without the extra money from my bank for the few weeks I needed it bills would have gone unpaid and I'd have ended up with extra charges. Thanks to the extra cash, I was able to meet my commitments and then payback the money - all for the grand sum of ten pence.
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Wed Jul 14, 2010 12:25 am |
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Amnesia10
Legend
Joined: Fri Apr 24, 2009 2:02 am Posts: 29240 Location: Guantanamo Bay (thanks bobbdobbs)
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Yes but that is not possible for those at the bottom of the income scale. There really needs to be more support for credit unions that could help such people.
_________________Do concentrate, 007... "You are gifted. Mine is bordering on seven seconds." https://www.dropbox.com/referrals/NTg5MzczNTkhttp://astore.amazon.co.uk/wwwx404couk-21
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Wed Jul 14, 2010 12:39 am |
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