The eye-watering interest rates instant cash loan providers charge their customers, sometimes as high as 4,000 to 6,000 per cent or even more, are sinfully high, according to the bishop of Durham.
Payday lenders charge literally usurious interest rates, according to the the Rt Rev Justin Welby, adding that all too many desperate households in the UK have to resort to payday advance loan providers because of their financial situation. The bishop says that Wonga, the most well-known provider of short term loans in the UK, with its 4,214 per cent APR short term loans, left him deeply worried that people will become desensitised to such shockingly high interest rates and accept them as normal.
The spiritual leader added that it’s been considered usurious to charge interest rates higher than 4,000 per cent ‘since the time of Moses,’ adding that nothing there was nothing Wonga could do or say to convince him otherwise. While he stopped short of calling out lenders for acting improperly or immorally, the bishop did say that payday lenders have become the only port of call for Brits in many regions of the UK where credit unions and traditional banks are simply unavailable.
Welby says the massive proliferation of payday lenders reflects the number of people who have been having to resort to collecting from church foodbanks on a monthly basis in order to keep their families fed. The bishop said he found it both horrifying and bizarre that so many have fallen prey to predatory lending due to the poor economy, and he was shocked to see the number of people coming to local foodbanks before the end of the month due to households running out of cash.