SCROOGE payday lenders are targeting skint Britons with post-Covid Christmas loans at “tempting” interest rates of up to 1,333%.
This cynical move has been condemned by critics as it comes just a day after the restart of payday loan repayments frozen during Covid-19.
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Borrowers have been granted payment holidays during the coronavirus pandemic. But now, a Sun investigation has found that loan-shark-style lenders are stepping up their Christmas loan offers now that government aid programs are coming to an end.
The broker, My-Quick Loan, offers ‘Christmas loans’ between Â£ 100 and Â£ 5,000, they promise, will be ‘in your account in ten minutes’. But the fine print on the company’s website shows that interest rates on the loans offered range between 49% and 1333% APR, with customers being warned: “Christmas loans shouldn’t be taken out of the way. light, as they could end up costing you more than some alternative options â.
Dear broker, Payday UK also offers ‘instant decisions on Christmas loans’ between Â£ 50 and Â£ 5,000 at rates between 9.3% and 1294% APR in just ten minutes.
Lender Loans 2 Go evokes the spirit of John Lennon’s festive anthem, “Happy Christmas: War Is Over” – with their Christmas offer – suggesting that the classic song “seems more relevant every year”. But the company’s loan offer starts at a whopping 1,013.3 percent APR – which the company may be suggesting does not bring “peace to the world, but will help build up the world.” ‘order in your finances’.
This means that if you borrow Â£ 550 over 18 months at a flat rate of 207.6% per annum, you will make 18 monthly payments of Â£ 125.71, or Â£ 2,262.78 in total – more than four times the amount borrowed. originally.
Loans At Home offers loans at a rate of 433% APR, meaning that a Â£ 300 loan taken out over 33 weeks will cost a borrower a total of Â£ 495 to repay. Another company, Cash Crazy, offers Christmas loans of up to Â£ 5,000 for ‘benefit people’.
“Shamelessly trying to cash in”
But a blurb on the broker’s website shows that a Â£ 700 loan taken out over 12 months will incur interest of Â£ 635.24 at a rate of 277.5% APR, meaning the full amount repayable over the loan would be Â£ 1,335.24.
Debt activists have warned of ending the leave program in late October – which subsidized the wages of nearly ten million workers – and other government support programs will reach record numbers in their pockets.
Welsh Labor MP for Swansea East, Carolyn Harris, said: âA lot of communities are really struggling right now and payday lenders are shamelessly trying to take advantage of those who are already in financial trouble. We must not just sit back and let this happen now that the refund freeze is over.
âPromoting quick loans with really tempting APR rates just before Christmas is an exploitation and will only worsen the glaring inequalities that Covid-19 has exposed across the country. The government must realize that we are still in an emergency – and this pandemic is far from over. Ministers must not give payday lenders a free pass to push individuals and families into poverty just as the second wave of this virus hits. “
Sara Williams of Debt Camel said, âLenders need to help you if your income has gone down or if you have lost your job.
âYou can offer credit cards, loans and catalogs for just Â£ 1 a month and ask them to freeze interest, giving you time to get back on your feet. A good debt counselor can help you do that.
Payday UK told The Sun: “Thank you for pointing this out. The ad (which includes a dynamically created landing page i.e. we are not targeting this specifically on our website) has been created and placed on the keyword “Christmas loans” in Google Ads by our digital agency.
“This is not in line with our internal advertising policies and has been removed and other steps taken to ensure this does not happen again.”
The other lenders did not respond to requests for comment.
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