Speedeloans payday loan borrowers pay an average 1% a day in interest

Payday loan companies are often accused of being “legal loan sharks” with astronomical interest rates as high as 5,784.3% APR being cited*. However, the latest data from payday loans lender speedeloans.com (whose APR is 2243% making them the second cheapest lender in a poll of ten*) has revealed that their customers pay an average of 1% interest a day on payday loans  - less than the equivalent daily rate than some banks charge for an unauthorised overdraft.**

Gary Miller-Cheevers, CEO of speedeloans, comments: “While there are some unscrupulous payday loan lenders in the UK marketplace, it is important for people to note that not all companies are the same. There are companies such as ourselves who provide a valuable and cost-efficient short term loan service.

“Around 48% of the population has less than £1,000 in accessible savings***. If a financial emergency strikes – whether it is an emergency veterinary bill; a broken down car or washing machine; or even payment for a school outing that has not been budgeted for - who can people turn to?

“For speedeloans, it is not about ‘legal loan sharking’ or ‘preying on the underclasses’. Our customers are all working people with a small, short term cash need which is no longer serviced by the high street banks. That is why we pride ourselves on providing responsible and cost-efficient lending for people who need a fast financial fix in an emergency”.

Data**** from the specialist payday loans company highlights that the average payday loans customer:

• borrows £221;
• has an initial term of 19 days at 1% interest per day;
• has an annual income of £21,000;
• is aged 32.

Other key data:

• 92% of all applications are declined;
• new customers are limited to borrowing £250 and a limit is also set at a maximum percentage of take-home pay;
• all customers are in monthly paid employment, with salaries electronically deposited in their bank accounts;
• 29% of borrowers are home owners;
• there is no gender differentiation – the split is 50 / 50;
• there is no geographic bias;
• while the median age of a borrower is 32, 39% of borrowers are aged 21-30, 36% aged 31-40 and 25% aged 40 plus;
• 55% choose to repay their loan in full within two paydays;
• 35% extend their loan past the originally agreed repayment date;
• 30% of those that settle their loans are repeat borrowers.

Ends

*Resource: Daily Mail 29.10.11

**As an example, as at today’s date, the Halifax and Santander Banks charge £5 per day for an unauthorised overdraft of any amount (capped up to 10 days per each statement date for Santander Bank);

*** Resource: Norwich and Peterborough Building Society cited in Credit Action Report

 ****Period: Feb 2010-July 2011

CONTACT: Gary Miller-Cheevers, speedeloans.com, CEO, telephone: 0844 879 3199 or 07545 148121, email: gmc@speedeloans.com

Stella Hulott, Speedie PR, telephone: 01843 831088 or 07932 750271, email: stella.hulott@speediepr.co.uk

About us

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.

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