Studies have shown that 60% of individuals who took away an online payday loan have actually regretted your choice. Photograph: Richard Saker for the Guardian
The genuine expense of lending to short-term borrowers is not as much as 2% associated with amount charged by Wonga, the absolute most costly and highest profile lender that is payday.
My Residence Finance, a not-for-profit organisation arranged because of the federal government additionally the nationwide Housing Federation this year, charges a representative APR of 69.9per cent, simply 1.66percent for the 4,214% APR charged by on the web loan provider Wonga.
Figures given by the organizations’ very own sites reveal it could be cheaper to borrow ВЈ300 from My Residence Finance for the year that is whole than from Wonga for 30 days.
The comparison in costs is perhaps even more shocking following a revelation by insolvency trade human anatomy R3 that up to 3.5 million folks are considering taking down an online payday loan within the next six months.