How is it that with a Provident loan the interest can be up to 500%, how can this be legal? I'm just curious about how these greedy people get away with charging the poorer people of society such exorbitant fees? Surely if the interest was lower then these people wouldn't have trouble repaying the loan? (No I don't have a loan with them, I stumbled across them by accident, and my goodness what a shock that was).
2007-02-25 01:23:17 · 8 answers · asked by ♥ Divine ♥ 6 in Business & Finance ➔ Credit
Actually, "payday" lenders can legally charge rates even higher than that! Their clientelle is made up of people who either don't know any better, or can't get a loan anywhere else.
These companies are not controlled by usuary laws. They can charge whatever the borrower is willing to pay.
In their defense, they HAVE to charge such high rates because nearly half of the loans they make go bad, so they have to make money somewhere...
The worst part is that if you have a loan from a company like that on your credit report, it automatically lowers your credit score, because they only make loans to high risk customers. This keeps the same peolpe coming back over and over again, because their credit never improves.
2007-02-25 02:27:54 · answer #1 · answered by khill 2 · 1⤊ 0⤋
Never heard of Provident, but they sound like scum.
Its perfectly legal I'm afraid, and they can get away with it as plenty of people are stupid enough to take a loan without reading the small print.
There was a survey recently about loans etc and it found that a large portion of the population thought the higher the interest rate was, the better it was!!!
2007-02-25 01:31:31 · answer #2 · answered by R Stoofaloh 4 · 1⤊ 0⤋
They are loan sharks and pray on those who for whatever reason cannot go elsewhere ...they charge what they like because the people are desperate..and they have been around for years and years under various names etc.
They are the lowest of the low , legalised thief's!
The government , if it wanted , could stop them in a second , but they cant be bothered and have wasted many opportunities to do so.
Sad.
2007-02-25 01:40:32 · answer #3 · answered by Anonymous · 1⤊ 0⤋
In the UK, its not illegal to overcharge for something. The onus is on the customer to find out the costs before entering into a contract.
Another example of this is a clipjoint - an unlicenced establishment which lures punters in with the promise of adult entertainment. The punter consumes drinks at the bar and then gets presented with a bill of several hundred pounds.
2007-02-25 02:57:05 · answer #4 · answered by nemesis 5 · 1⤊ 0⤋
You know i can remember when i was a kid my parents having a loan with the Provident.
2007-02-25 01:26:59 · answer #5 · answered by richard_beckham2001 7 · 1⤊ 0⤋
Maybe they offer small loans and call for the repayments. This is a very expensive way of borrowing, period.
2007-02-25 08:38:14 · answer #6 · answered by fred35 6 · 1⤊ 0⤋
law of the market place /if you dont want to take the loan at these rates go elsewhere
2007-02-25 01:27:12 · answer #7 · answered by Anonymous · 0⤊ 1⤋
Well...nobody forces you to take a loan from them...
2007-02-25 01:31:35 · answer #8 · answered by MARCO 7 · 1⤊ 0⤋