Payday loan - short term loan to be paid back at your next payday
High interest loan - is a loan regardless, it’s not designed to be paid back in full by the next pay day.
Clues literally in the title of the product, payday loan
Poor - I know from my line of work that these places lend to those under financial duress. More evidence that Monzo are attracting customers from a poor credit demographic.
The FCA (and CAB) quite clearly consider both as one and the same.
From your own source:
Payday loans are short-term loans for small amounts of money.
describes the nature of the products offered by these loan companies too.
It seems to me that we’re quarrelling over what amounts to little more than semantics, which is ultimately irrelevant in judging these products for exactly what they are.
These are still not payday loans.
Even your attempt at saying they are makes that obvious.
No your misconstruing what short term is, a loan of 12 or more months isn’t short term.
I believe the term from America for these loans was / is subprime loans. I just dunno if that’s what we call them over here, or if it’s something different.
Or perhaps we just have different ideas of what short term means. Time is relative. 12 months is short term to me.
For final clarification, neither company offer payday loans. It’s high interest loans which are something completely different.
That’s my out of this thread now though, as we’re here about loans and not payday loans. Nothing else to discuss
Interestingly finio are Oakbrook. But the other appears to be a new connection.
Whatever we want to call them I still think for me, personally, this isn’t a good look for Monzo and definitely not “making money work for everyone” ethos.
Sure, if Monzo didn’t do this people would just go direct or worse. But it still comes across as downright predatory to me.
I’d much rather Monzo worked with Oaknorth to improve their easy access savings rates.
Finio are Oakbrook not Oaknorth.
Different ends of the spectrum. But totally agree with the rest.
Haha I read oak and my brain did the rest.
It’s a complete distraction from my point anyway! Which is that they’re predatory. You used a tactic right out of the Liz Truss handbook and I played right into it! Fair play!
It’s your thread though, and I’ve said all I need to in respect of my views on what’s being offered here, so I’ll bow out of the discourse here so you can discuss your thread with others without further disruption from me!
I have to say I’m on the predatory side of the argument here – it just feels wrong.
No, Monzo aren’t pressuring anyone, but if somebody in a poor financial position sees the recommendation I think they’re more likely to go for it because they trust Monzo.
It almost feels like abuse of power/position. “Monzo are here to make money work for everyone and they’ve been so helpful, so maybe this is my best option?” and go for it without any further thought.
Instead they should direct people to comparison sites or CAB or at the very least put a big disclaimer about these being less than ideal APRs.
But I also agree that they’re not payday loans. Payday loans to me are very short term, ie 1-3 months to be repaid after your next payday and designed to keep you coming back. This is a step above that at least
Monzo’s whole MO is that they want to connect users to financial services. Where they can’t connect you to their own, they’re referring you to others.
It’s literally a non starter. It’s not predatory in the slightest.
“Ohhhh Monzo showed me a loan offer but it’s a higher APR than a millionaire would get so I took it because I felt pressured and now my life is ruined somehow”
I suggest you tone down your comments a bit. Just because you disagree there’s no need for taking such a condescending tone.
I’d argue Monzo were never about connecting users with other financial services. Tom Blom spoke about it like 5 years ago but that whole marketplace idea was pretty much dead in the water. Starling are the one who do it – to some extent.
I know I said I’d bow out, but this is such a tone deaf thing to say that it can’t go ignored.
In case my allusions to analogies weren’t clear enough, allow me to be very blunt. These types of financial products cost lives.
Perhaps you’re privileged enough to not be able to consider that happens, but money problems are among the biggest contributors to suicidal feelings. Expensive loans like these are often the last desperate attempt to fix a problem they’re not designed for or able to fix, but will only exacerbate.
That’s why you send people to CAB or stepchange, or someone that offers debt help services before you ever make assumptions and recommend excruciatingly expensive loans like these. It’s not about being a millionaire either. Most working people with good standing credit and not in financial difficulty will be able to get a loan with rates that are more than 90% cheaper than the best rates these providers offer. There’s no money in this, but it will save lives rather than cost them.
Monzo should also be able to identify if a customer is on benefits or has a low income, they could and should recommend the grants and government backed loans that are available to them. They’re also short term (up to 24 months) but they’re far more affordable, because they’re interest free, and grants won’t need paying back at all. They can be a massive help, but so few people seem to be aware that they exist. No money in doing that either though.
To reiterate, these loans will cost lives. By recommending them to potentially desperate struggling people, Monzo will be complicit in some future suicides. No ifs, buts, or mights. We’re discussing an eventuality not a probability.
Theres no lunacy in what @ndrw is saying. But it’s telling that you rebut them with an ad-hominem instead of responding to their point.
Now I’ll bow out.
Seems like we’ve outed a loan shark
Coming out with things like this really doesn’t help your argument at all.
Quick! Flag the post! Someone said something I don’t agree with so I’ll say I was offended by it!
Society is so tiring these days.
- Someone says something mental
- Someone says, “that’s a bit mental”
- “You can’t say that!” How dare you! “Sorry I said I would go but I simply have to come back to respond to this outrage”!
It’s a joke. The amount of garbage that has been spouted in the past couple of posts and presented as the gospel truth is unreal.
And I say that not as a “privileged person” but someone who you were actually referring to who has sought help from stepchange for a chronic financial problem (which is now fixed).
- as started very clearly, these are not pay day loans!!!
- if people get into difficulty, it’s not solely down to being sold financial products in the first place
- These loans will cost lives!!! ARE YOU MAD? In that case, mortgages cost lives too don’t they? Because people who get into financial difficulty can have mortgages too, right? Where do you draw the line?
Just because an interest rate is higher than people might like, doesn’t mean there isn’t a place for those products in the marketplace. Some people (like me) with poor financial track record who are in the rebuilding phase, recognise there is no way anyone would loan you money at low APRs given personal history. Have you looked at your credit card or overdraft APR’s recently? Do you have a problem with those?
Some people need to get a grip and stop complaining about everything and anything.
You can say what you like but equally I have a right to call it out as insanity.