MP Stella Creasy has been leading a high profile campaign to stop the “legal loan sharks” by pushing for a cap on interest rates charged on products such as payday loans. MEP Alyn Smith from the Scottish National Party (SNP) was reported last week* as saying: “Cameron and his cronies must get their act together and regulate these companies out of existence before more people face financial ruin as a result”.

Mr. Miller-Cheevers comments: “Speedeloans supports the continuing need for a well run and tightly regulated short term finance market and applauds those members of the government looking to protect the public from unscrupulous lenders.”

He suggests that one solution for all short term lending would be the introduction of expressing the cost of loans in £’s terms, rather than APR (or EAR often quoted for bank account overdrafts), so customers can easily compare the actual cost, and quickly work out if it is something they can afford. He also has concerns over the use of the term EAR.

“APR’s and EAR’s can be confusing for many customers – and also misleading. For example, speedeloans has to quote an APR of 2243% for a payday loan and yet HBoS are able to quote 0% EAR as an overdraft amount.

“The EAR is the actual annual interest rate for an overdraft and doesn’t take into account fees and charges, while an APR does. How can customers compare borrowing money on a like-for-like basis when the APR means something different to an EAR? Maybe this is also something that should be investigated – transparency for all types of borrowing.

“Speedeloans is already committed to offering a fair and transparent service and welcomes changes that would put a stop to disreputable lenders and their profiteering. We ensure that each potential customer knows what the cost of a payday loan will be before they proceed and have recently strengthened our systems to reject applicants who already have high levels of debt or who have taken on multiple payday loans through less scrupulous operators”.

Mr. Miller-Cheevers added: “Used responsibly, payday loans can offer a cost-effective way to satisfy emergency short-term loan needs. With an average loan application at £250 for a term of 19 days until next payday, the cost for this would be just over £50 including all costs. Compare this to an unauthorised overdraft at Bank of Scotland’s Halifax of £5 per day, which comes to £95 plus the £10 per bounced item they charge, means that their charges are over double that of speedeloans”.

Speedeloans was named the second cheapest payday loan provider out of ten UK companies in recent research**.

Ends

*Press Association 05.01.12

** Daily Mail 29.10.11

Richard Burgess, Director at Cover4Caravans, commented: “We have spent the last few months working very closely with our expert design team to update our website to make it friendlier and even easier to use – as well as make it stand out from the rest!

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The new design – which offers all the great quote and buy online benefits of the previous site but is even easier to navigate around – features colourful wild animals and a fresher look and feel.

The revamped site also includes direct feeds from the Cover4caravans insurance blog and its Twitter page, as well as linking to its Facebook presence. This means that current, up to date caravan insurance news and information can be accessed all from one place.

Visit www.cover4caravans.co.uk to see the new design as well as get an online caravan insurance quote. Alternatively, please call the extremely experienced Cover4Caravans team free on 0800 970 7172 for more information on caravan insurance.

According to research* by the R3 insolvency group, millions of Britons will turn to a payday loan in the next six months in order to tide them over until their next payday, with just over 16.5% becoming “zombie debtors” – a phrase coined to describe people who can only pay the interest on their debt and not the debt itself.

Commenting on the R3 report, Mr. Miller-Cheevers says: “We understand that only 2000 people were surveyed. As only half of all adults ever use credit, the results are a little skewed.
The figures do not agree with our data that shows that only 5% of our customers (one in 20) experience real debt problems.

“This substantiates our position of being a responsible lender. And for those 5% of customers who do get in to financial difficulties, we have arranged ‘short term assistance’ plans as well as working with reputable agencies such as the Consumer Credit Counselling Service”.

Mr. Miller-Cheevers also highlights statistics from the Debt Support Trust** which say that the average payday loan borrower will have not one but four different payday loans on average, borrowing money from one payday loan company to pay back another payday loan company: “Sadly, there are some unscrupulous lenders who will saddle already debt-ridden individuals with more debt misery. Speedeloans, however, takes its responsibilities seriously. We have many internal measures to restrict lending to selected applicants and we further ensure that those who are we prepared to lend to, we only allow them to borrow a sensible amount in relation to their finances.”

He adds that unlike some other payday lenders, they have recently strengthened their systems so that they can see if the applicant has multiple payday loans: “We vet our customers responsibly, rejecting 92% of applications. Our enhanced credit checking system is designed to weed out those people who already have multiple payday loans in place.

“Speedeloans is a responsible lender, offering an affordable cash advance until payday which is often cheaper than an unauthorised overdraft***. While there are some unprincipled lenders out there, consumers should be aware that we are not all the same and some, like ourselves, do provider a useful, affordable service for one-off cash needs”.

RESOURCES:
*BBC online 07.12.11
**Debt Support Trust
*** Cost of an £150 unauthorised overdraft for 20 days*

Current benefits with this new loans service include:

• up to 85% Loan To Value
• up to £500k considered (some lenders have a maximum of £100,000).
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• higher Loan to Values are generally on offer now for customers with current or historical adverse credit.

For more information or to get a loan quotation, please visit Badgerloans at: www.badgerloans.co.uk

About Badger Loans

Badgerloans equals finance in black and white. Through our relationship with Willows Finance, we can help you access loans for most purposes. So whether you are looking for long term borrowing or need a cash advance until payday, why not get a no obligation quote today?