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Loans by text now on offer
A company offering loan approvals via text has opened in the UK, claiming to deliver money to accounts in minutes.
The service can be set up online in a one-off transaction and customers can text the company at any time to receive a 'simple' loan of £100.
However, the company operates at a 994 per cent APR level, meaning that it will cost £10 (plus a £1 handling fee) to use the service.
This means that customers who use the service must pay £110 back, although this will go up to £135 if the loan is not payed back within seven days.
The fees continue to rise sharply should repayment be late, with reminders and "administration fees" of £20 to £25 every two days.
Should the loan not be repaid after just 23 days, the total repayable amount will be £200.
Average loan amounts of around ten to 12 per cent APR would mean that such loans taken out under other providers would only result in approximately £105 to £106 needing to be repaid after 12 months.
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The service can be set up online in a one-off transaction and customers can text the company at any time to receive a 'simple' loan of £100.
However, the company operates at a 994 per cent APR level, meaning that it will cost £10 (plus a £1 handling fee) to use the service.
This means that customers who use the service must pay £110 back, although this will go up to £135 if the loan is not payed back within seven days.
The fees continue to rise sharply should repayment be late, with reminders and "administration fees" of £20 to £25 every two days.
Should the loan not be repaid after just 23 days, the total repayable amount will be £200.
Average loan amounts of around ten to 12 per cent APR would mean that such loans taken out under other providers would only result in approximately £105 to £106 needing to be repaid after 12 months.
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Published: 26/11/2009
The information in this article was correct at the time of publication and contains time sensitive data and links, it may not be accurate at the time of reading.