Ever had a #paydayloan or used the #cashconverters buy back service? This one’s for you.
I wanted my first blog , other than my introduction, to be something many can relate to. What better subject to use that pay day loans. I recently realised something that may save you, the consumer some money. Payday loans are currently in and out of the news and let’s face it, it’s not always good publicity they receive. I am in no way supporting payday loans. The subject I am about to blog about is directly related to myself as I have used both of these avenues.
Cash converters offer a ‘buy back’ service. This allows individuals who desperately need extra cash for emergencies, food, unexpected bills, healthcare etc to borrow money against some of their valuable personal belongings. This is a good service, or is it? I recently hit financial difficulty myself and found myself using the buyback service as I had no other options and it was my only means of raising some money at the time. So, I put my Samsung (brand new) laptop into the buyback scheme. I borrowed £100 for 28 days and paid back £132.50. That is £32.50 interest for a 28 day loan that is an APR of 2828.13%. If you find yourself in even more financial difficulty Cash Converters will allow you to pay back the interest on the loan to extend it however, you will also have to pay the interest the second time round also making the total to pay back including money borrowed £165.00. If for any reason you cannot pay this or are late with payments again you lose your valuable item.
Payday loans fall into a very similar category. Normally you borrow £100 and pay back on average £25.00 a month, this loan this has an APR of 1355.2%. Cheaper than a cash converters loan and you don’t lose any valuables if everything should go pear shaped on payday. However, this is not advisable, payday loans add interest and late fees, a lot higher and more frequently than cash converters if you were late to pay your balance. They are also known to use bully tactics and threatening phone calls, letters and emails to try and bully the cash back from you that you simply don’t have.
In my opinion stay clear from both of them, maybe even seek a credit card? Some credit card providers will provide ‘bad credit’ credit cards, these normally carry a higher APR than someone with good credit however, they are a great way to build your credit score if payments are paid each month, If you can’t pay the balance in full then pay at least the minimum payment and a little more, if not, then again high late fees will be applied. The best way to borrow on a credit card, whatever the interest (unless interest free) is to pay the balance back in full each month.
The best thing to do is seek help from a friend or family member.
Something to think about: Cash converters look on eBay when calculating the value of your possessions, they will only give you an amount that is around the cheapest on eBay. It may be wise to set up an eBay account yourself and cut out the middle man.
A quick note I took from the Martin Lewis website today – if you borrow £100 from #wonga and make NO repayments, in 1 year you will owe them £4200!!
I hope this post helps someone out there who may find themselves in this situation. As I said previously this post is from personal experiences and I wanted to share it with you guys.
#finance #debt #payday #paydayloans
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