One debt charity recently stated that free cash loans could be targeting families with financial troubles by luring them into paying massive penalties for late repayments, industry experts report.
Consumer Credit Counselling Service spokesperson, Una Farrell, had nothing but bad things to say about one instant cash loan company that has begun to offer short term loans with 0 per cent interest rates, even as the lender’s founder states that the move is designed to be a help, not a hindrance.
Founder of provider InstantLoansDirect.com, Giles Coutts, remarked that he hopes his firm can aid consumers during a bleak financial time. However, Ms Farrell instead accused the provider of preying on the put-upon, with the penalty rates for missing a repayment on the loan simply too high in her opinion.
The deal, which will provide as much as £300 to a household for period of time as long as eight days without interest, as long as the borrower can prove they make at least £750 every month, will be available to the public through March. This could be a real boon for those hard-pressed by the current economic situation gripping the UK, and with the added bonus of zero per cent interest, industry experts predict the loans will prove to be quite popular.
However, Ms Farrell took issue with the penalty repayment scheme attached to the loans, with charges of 50p on every £100 borrowed will stack up every day until the loan is repaid. The consumer credit expert says that this equates to a 448.3 APR, but proponents of the lending scheme have pointed out that the maximum penalty fee of 150p a day is hardly going to send anyone to the poorhouse if you take an extra day or two to pay back the loan.