Latest on call for payday loans cap
By Matthew Plant
As you may have read, some MPs are calling for a cap on the cost of high-cost credit such as payday loans. They’re being backed on this by what might seem like an unlikely supporter – a payday loan provider.
As credittoday.co.uk reports, Gary Miller-Cheevers is chief executive of payday loan provider speedeloans.com. He said that one solution could be to stop using APR / EAR for short-term lending – and show what the cost of a loan would actually be in pounds. Doing this, Mr Miller-Cheevers said, would really help people compare the cost before they agree to borrow money.
“APRs and EARs,” he explained, “can be confusing for many customers – and also misleading.”
He continued: “The EAR is the actual annual interest rate for an overdraft and doesn’t take into account fees and charges, while an APR does. How can customers compare borrowing money on a like-for-like basis when the APR means something different to an EAR? Maybe this is also something that should be investigated – transparency for all types of borrowing.”
Payday loans are a subject which is attracting a lot of attention at all levels. Just yesterday, they were debated in the House of Lords.
Image © iStockPhotos / Kirby Hamilton
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Tags: payday loans, credittoday, interest rates, borrowing
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Article source: http://www.thinkmoney.com/loans/news/latest-on-call-for-payday-loans-cap-0-5123.htm
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