HERTFORDSHIRE, ENGLAND, November 11, 2011
/24-7PressRelease/ -- In a statement issued today, industry expert Gary Miller-Cheevers (and CEO of payday loan company speedeloans.com) has backed Labour MP Stella Creasy's call to put a cap on the cost of borrowing.
In a desperate economy, it is reported that Ms. Creasy wants to stop the "legal loan sharks" by putting a cap on interest rates charged on products such as
payday loans before Christmas when a boom in applications is expected.
Gary Miller-Cheevers comments: "Payday loans fill a short-term need and used - and charged for - responsibly, can be a cost-effective way to get emergency cash when the need arises. With research* showing that 31% of Britons have no accessible savings, if someone is hit with an unexpected bill (for example, they get a flat tyre and need their car in order to get to work), a payday loan could help them manage until they get next paid.
"However, there are lenders who are not responsible and who charge their customers extraordinary amounts to borrow a smallish amount of cash. Certainly, the idea of some kind of cap in theory always sounds sensible and we endorse that. The problem is what are you looking to cap - the APR or the cost of credit?
"The APR being an expression of annual interest is a wholly inappropriate measure of a loan that can last from three days to a few months in extreme cases. Our average loan request is for a term of 19 days and works out at a daily rate of 1% interest!
"Speedeloans is all in favour of expressing the cost of their loans in GBP's terms, so customers can firstly, easily compare the actual cost, and secondly, quickly work out if it is something they can afford.
"If we relate our loans to various options like borrowing GBP100 from a friend on a Tuesday until the end of the week, and buying him some fish and chips as a 'thank you' for GBP5 on the way home from the pub on Friday after paying him back, this equates to a daily rate of 1.25% or an APR of over 6,000%!
"If total cost of credit is the target, maybe the authorities should start with the banks who can charge GBP5 per day for a GBP100 unauthorised overdraft, which equates to an APR of over 80,000%!
"The banks say that they only ever charge the fee for a limited time - well so does speedeloans."
Mr Miller-Cheevers summarises: "We fully endorse stopping disreputable companies from piling a debt of misery on to their customers with extravagant loan costs - however, it has to be done in such a way that the less than scrupulous providers cannot still rip-off unsuspecting customers in other ways - such as charging higher fees and penalties."
Speedeloans was named the second
cheapest payday loan provider out of ten UK companies in recent research**.
* Resource: Norwich and Peterborough Building Society cited in Credit Action Report
**Resource: Daily Mail 29.10.11
www.speedeloans.com is a practical alternative to banks that can no longer help their customers with their short term financial needs. Privately backed by people who understand our customers, our mission is to provide instant decisions and two hour money whenever they need it.
We are at the cutting edge of modern consumer finance by offering small, short term loans online with real speed and ease. We are flexible and paper free which means you can apply using our easy-to-use website whenever you need cash in a hurry. We have a consumer credit licence from the Office of Fair Trading.
In August 2011 we won an award for "Most Responsible Lender" which we welcome as proof that we are doing the right thing both for our own business, but also more importantly, our customers.
---
Press release service and press release distribution provided by http://www.24-7pressrelease.com# # #
Press Release Keywords:Read more Press Releases from Gary Miller-Cheevers:
