maninahat said:
What should be a crime is ultra high interest loans.
If you ever suffer the misfortune of having to watch daytime tv in the UK, you'll bear witness to a non-stop barrage of loan and debt ads, always offering the most ridiculous rates imaginable. I saw one that had an APR of 1730%. 1730%!
That should surely come under loan sharking, right? Someone needs to regulate this shit, because the kind of people who end up taking loans tend to be the kind of people too stupid to realise what the percentages mean in the first place. If only to protect these poor, desperate folk from themselves, I think these businesses should be banned outright. Fucking usurers.
Loans with those rates of interest are "pay-day loans", which generally have a maximum duration of 30 days. The APR is the amount you would pay back if you kept the money for an entire
year, so it's not
quite as scary as it sounds.
But yes, I think pay-day loans are a horrifically bad thing. If you desperately need a short-term loan to tide yourself over until pay-day, there are far better ways of doing it. Many (if not most) banks are happy to extend your overdraft on a temporary basis, often for free (as long as you always pay it back in time). And the Citizens Advice Bureau offers free money advice, including information about local council schemes to offer short-term loans (which usually have extremely low interest, as the council doesn't make money off them).
I wish I could knock on the door of every person in Britain and tell them
never to get a pay-day loan
or a "debt consolidation" loan (which have low interest but lock you in for
decades, with a penalty for paying off early). If you have money problems, talk to the Citizen's Advice Bureau and then talk to your bank.
*gets down off soapbox*