New money lending service opens in Sheffield

[psynuk]

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89.9% interest is excessive; where did you get that figure from?

 

Its on the site, 89% comes from one of the lenders 'Five Lamps'

http://www.fivelamps.org.uk/finance/personal-loans/

"Representative Example

 

On £100 borrowed over 12 months:

 

Monthly interest rate of 7.49% (equivalent 89.9% pa) fixed

Total charge of credit £49.20

Representative APR120%

Loan duration 365 days

Total repayable £139.20

Payments: 12 payments of £11.60"

[Cyclone]

Of course sound financial advice should be to not borrow any money in the first place. Stop the cycle of borrowing. Earn more. Save.

 

---------- Post added 11-08-2015 at 09:35 ----------

 

 

Yes. Nothing ethical about a money broker.

The council could have put 220k into money education, instead of short term patch'ups.

 

---------- Post added 11-08-2015 at 09:43 ----------

 

They claim to be offering a low interest alternative to door step lenders.

89.9% APR is not a low interest alternative.

 

The council were simply putting money into a new local business, as per the scheme that they created and funded.

 

---------- Post added 11-08-2015 at 13:16 ----------

 

Here is my source for the above claim

 

http://www.theguardian.com/money/2015/aug/08/sheffield-money-payday-loans-rates-poverty

 

Its rates are far from the lowest in the market – but Sheffield is not trying to compete against Tesco or First Direct. Debt-ridden locals can be paying 272% on 12-month loans from doorstep seller Provident Financial, but will be offered between 49.9% and 89.9% by Sheffield Money. Someone wanting £500 for one year currently has to repay Provident Financial £910, but only £610 to Sheffield Money.

 

That's still a high interest loan, but like it says, they aren't competing for customers with a good credit rating who can borrow from a regular lender.