Typical 343.4% APR

Discussion in 'Finance, Property, Law' started by Semper_Flexibilis, Oct 17, 2007.

Welcome to the Army Rumour Service, ARRSE

The UK's largest and busiest UNofficial military website.

The heart of the site is the forum area, including:

  1. FCUK ME! I thought this was a wind up...but it`s not! Are people really that desperate! It`s frightening.
  2. Nope! Not a wind up and they advertise in all the assorted Forces mags…
  3. Holy shit! This cant be legal surely?
  4. Is legal as they have printed the rate but is it moral? Especially as they appear to be in magazines aimed at the military.
  5. It is legal, there was a story on local news couple days ago - guy bought a car but couldnt afford the insurance/tax (not sure how he paid for car) so took out a logbook loan.

    He had to make first repayment the day he took out the loan so then didnt have enough to tax/insure the car
  6. I may be missing something here, but if you take £215 (Commitment fee) from the total repayable (£3120) and average out over 52 weeks then annual repayment is £2604 and you get total APR of about 74%. Still outrageous, but nowhere near 343.4%, unless my sums are wrong.
  7. Blimey! So that's where Gordon Brown got his loan from :lol:

    PFI schemes 'to cost NHS £53bn'

  8. Methinks the sums may be off… they may be compounding the interest daily and that makes a loan VERY expensive.

    All in all, they seem pretty nasty people…

  9. Not at all nasty - they can shove whatever rate they like on, as they have quite clearly posted the rate.

    If someone's stupid enough to take such a loan, they deserve to be hit with a shovel. Repeatedly.
  10. According to my sums, using the amount shown in the advert.

    £1500 borrowed, paid back at £53.80 for 58 weeks, you pay back £3120.40.

    An increase of 208% and a profit margin for them of quite a fair amount me thinks.

    Legal maybe, but shocking never the less.
  11. Yes, if I could get a guaranteed 100% profit return in a year on capital, I'd be a very happy bunny. However, the overheads must be high - leg breaking gorillas to collect the installments do not come cheap. However, if you are mug enough to sign up (and we all know people that are), you deserve all you get.
  12. I think you will find that all the comercial organisations that lend to people with poor credit histories charge high rates of interest though not many will advertised their worst case as this lot do. Why do they charge such high rates, well their customers have already demonstrated their ability to default on their loans in the past so it is fairly likely that a good proportion of their customers will default, the high rate of interest covers the fact that their chances of getting any cash from defaulters is low.

    Many of their competitors show much more advantageous rates in their adverts and note that rates vary according to circumstances, covering themselves for the higher rate when you get a quote.

    The best bet for most people with a bad credit history is a credit union

  13. I wonder if they advertise in Globe & Laurel? Potential for rent-a-thugs to come badly unstuck. :wink: