The Anonymous Widower

Payday Loans Get A Cap and a Kicking

This morning the Financial Conduct Authority has imposed a cap on payday lenders. The BBC report starts like this.

Payday loan rates will be capped at 0.8% of the amount borrowed a day,said the Financial Conduct Authority (FCA).

In total, no one will have to pay back more than twice what they borrowed, and there will be a £15 cap on default charges.

I do hope that this type of loan quickly becomes a blip on the history of finance.

If you might at some time need to borrow money, make sure that you can get the best credit rating you can, by behaving responsibly. This should help to give you access to finance at a reasonable rate when you need it.

But we can all help to get rid of these high cost loans.

I believe that if we put our savings in a peer-to-peer lender that lends to others, this will put more money in the hands of responsible lenders, who can lend to those that need to borrow, who fit their lending requirements.

So you’ll be helping yourself and also helping others.

But do choose a peer-to-peer lender that is or will be regulated under the FCA.

Zopa, who are regulated, say this about their relationship with the FCA

November 11, 2014 Posted by | Finance | , | Leave a comment

Payday Lenders Fight Back

Payday lenders have had a lot of bad publicity today.  So Oakam in Dalston decided to fight back.

Payday Lenders Fight Back

Payday Lenders Fight Back

I suppose the only guy doing well is the guy on stilts.

Perhaps we need more street performers on the High Street.

October 3, 2013 Posted by | Finance, World | , | 1 Comment

Dalston On BBC Breakfast

Dalston featured in a report on BBC Breakfast this morning.

It was all about payday loans.

It is almost impossible to walk down the Kingsland Road without falling over the endless number of boards offering loans on the street.

All loans no matter where they are from, should be properly registered on a central database, which is then checked for anomalies and excessive borrowings.

The FCA is imposing new regulations as reported here on the BBC.

But no matter what regulations are tabled, it will not stop people borrowing at rates, they can’t afford. So the new regulations will probably turn out to be a business opportunity for loan sharks.

October 3, 2013 Posted by | Business, Finance, News | , | Leave a comment

Plymouth Gives Payday Lenders The Boot

Plymouth has banned the adverts for payday lenders from billboards and bus shelters, as is reported here in the Independent.

Perhaps they could use the space saved on bus shelters to provide user-friendly maps and bus information, to help visitors to the city.

August 12, 2013 Posted by | Finance, News | , , , | Leave a comment

The Archbishop In The Wonga

Before you open your mouth, it is always best to check your facts or in the case of Justin Welby, your church’s investments. If he had he’d have found that his target yesterday, was a company they’d indirectly invested in. It’s reported here on the BBC.

A few weeks ago, I wrote about Robert Peston’s views on Wonga. I said this.

Obviously, Wonga did a lot of analysis on their data and this has led them to their success, as they have the right model and technology. Peston says Wonga’s technology is world class.  If banks such as RBS, Northern Rock and Bradford and Bingley had had world-class technology, they might not have gone bust.

I would add to that now. Perhaps, if when you sign any credit agreement or loan, how many would be refused if versions of Wonga’s technology is used. The success of any loan or credit company depends heavily on the quality of its lenders.

But the downside is that there would be a hard-core of people unable to get any form of credit.  No reputable lender, and especially a credit union, would ever touch them.

July 26, 2013 Posted by | Finance, World | , , | 2 Comments

Archbishop In Cloud Cuckoo Land

This story about how Justin Welby aims to compete Wonga out of business, is on the BBC today. Here’s the jist.

The Archbishop of Canterbury has warned the online lender Wonga that the Church of England plans to force it out of business – by competing against it.

He may have laudible aims, but like the poor, loan sharks, where legal or not, will always be with us.

What the people who use Wonga need is money and if everybody supported credit unions, that wouldn’t give any money directly to those who need it.

Credit unions, like all responsible lenders, don’t lend money to those who would be unable or unwilling to pay it back.

July 25, 2013 Posted by | Finance, News | , , , , | 4 Comments

Cissé’s Stand On Wonga

Papiss Cissé is adamant he won’t wear a Wonga-branded shirt, as reported here in the Guardian.

I support his stand.

I would like to see a law, where all loan companies from the banks, through peer-to-peer lenders to the legal loan sharks, have to publish the amount of money they lend in various parts of the country.

That way we could see if shirt sponsorship was a good idea for lenders.

July 19, 2013 Posted by | Finance, Sport, Travel, World | , , , , , , | 1 Comment

What Do You Get When You Cross Zopa With Wonga?

At a first glance Zopa and Wonga are at the two ends of the financial spectrum, when it comes to borrowing and lending money.

Zopa, Funding Circle and Ratesetter, and probably a few other peer-to-peer lenders in the UK and around the rest of the world, take in money from those who want a bit more interest on their savings and lend it out to those who after a series of rigorous checks, look like they might be able to repay it.

I have seen figures which show that peer-to-peer lending grew by 300% in the last year and has now lent over half a billion pounds. So they must be doing something right! On a personal note, although my return has dropped a bit in the last year, I still get nearly five percent on my money invested in Zopa before tax, after taking into account all charges and bad debts.

Wonga and the other payday lenders probably lend a lot of their money to people who’d never qualify for a loan from Zopa and their peers. The interest rates are a lot higher and the terms are generally not as favourable as those offered by Zopa.

In some ways what unites Wonga and Zopa is their efficient systems, backed by state-of-the-art computing. Robert Peston talked about Wonga’s systems in this article.

eMoneyUnion is a new peer-to-peer lender, which could be thought as a company, that takes the best practice of Zopa and Wonga and combines them to create a company that can lend to those who wouldn’t get a Zopa loan, but also gives a good return to its investors. This article is about the launch of the company.

So it would appear that eMoneyUnion could be the cross between Zopa and Wonga!

Let’s hope it all works out well.  I shall be investing.

July 9, 2013 Posted by | Business, Finance | , , , , | Leave a comment

The Archbishop Preaches

According to the Sunday Times, the Archbishop of Canterbury, wants to drive payday lenders and loan sharks out of business. He has delivered a speech to the House of Lords on the subject and it’s reported here.

I don’t share his optimism, as there are some bad practices that are impossible to stamp out, save of executing everybody who does them!  But even would that discourage smokers? I doubt it!

He says we should encourage the growth of credit unions. It’s a laudable aim, but we have just so many financial illiterates for it to make any difference.

 

 

June 30, 2013 Posted by | Finance, World | , | 3 Comments

Is This A Real Payday Loan Site?

This site called lolcatloans.com was mentioned in the Money section of The Times today.

Is it real? I certainly wouldn’t borrow any money from them, despite the appealing cats!

The site appears to be registered in Panama, although it does appear to offer loans in pounds.

I would sugest that you laugh at the cats and do no more!

June 29, 2013 Posted by | Finance, News | , | Leave a comment