The Scottish National Party has urged the UK government to take steps to curb the interest rates some instant cash loan providers charge for their cash loans, industry experts recently reported.
The SNP has requested action to be taken on this issue, with Alyn Smith, MEP, remarking that low income earners could be left with serious financial difficulties due to the high cost of repayment on these instant cash loans. Mr Smith commented that there are some lenders who are charging in excess of 4,000 per cent APR interest rates on their loans, though industry experts say that using an annualised metric to calculate the cost of repayment on a small-scale loan with a much shorter term than a traditional one overinflates the figure to such eye-watering proportions.
The MEP said that the UK needs to follow the trail blazed by the lion’s share of US states and many European countries in limiting the interest these lenders are permitted to charge. Exhorting the Government to ‘get their act together,’ Mr Smith called for more strenuous regulations before additional numbers of Brits are brought to the brink of financial ruin.
Many lenders were targeting vulnerable and hard-hit Scots over the festive period, according to Mr Smith, as many were in need of some extra finance in order to make gift purchases and also make ends meet last month. However, the MEP said that these lenders do little to help and instead can result in leading people even further into debt, adding that additional regal restrictions clearly need to be put in place to ensure these interest rates, which he called ‘ludicrous,’ were curbed.