The Problems of Borrowing and Lending Money

Neither a borrower nor a lender be. Said Polonius in Shakespeare’s Hamlet. He’d turn in his fictional grave if he saw the number of loan companies available on the market these days!

The major problem with these companies is their demographic. If they were honestly providing a service wherein people in full time work find themselves struggling with an unexpected bill one month could borrow a small amount of money and pay it back, with interest after the next payday, then they would not advertise predominantly on daytime television. They also apply extortionate interest rates to the borrowed amount, leaving customers more out-of-pocket than they were before they got this loan.

The companies have received heavy criticism in recent months from regulators who have noticed this targeting and are implying that these companies are too tailored towards these members of society and it is actually bordering on the unfair. These companies exploit the vulnerable members of society who cannot pay back the loans and their advertisements emphasise the speed and ease of service discouraging customers to make thorough checks with regards to their ability to pay the loan back. The regulators have not reached any firm conclusions regarding the amount of interest charged but that is one of the major issues raised by customers; the adverts are carefully moulded to promote the ease with which loans are granted. This means customers give less thought to whether they can afford it or how much interest they are going to pay back; they simply see the possibility to have more money in their bank account.

That sounds condescending but it is the loan companies at fault here, the adverts epitomise the point Polonius was trying to make when he went on to say “For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.” The loaning of money between people – regardless which side you’re on – is dangerous and one or the other becomes irate. In this world of corporate companies that lend money it is often infinitely more complicated than just ‘an irritation’ but the basic idea is there, money is too precious to be exchanged temporarily with such little contemplation.

For more information on payday loans and companies such as Wonga who are in the spotlight with regards to these advertising campaigns and the interest rates, have a read of our news articles on Wonga at http://www.customerservicescontact.co.uk/wonga-telephone-number/. Alternatively to speak with a member of Wonga customer services, Click Here for all contact details.

Payday Loan Advice

It’s easy to get sucked in to the idea that pay day loans are the way forward if you’re short of cash this month – we are inundated with emails, texts, phone calls and adverts on the television and internet offering us ‘free’ money, supposedly. The key is to not fall into this trap, payday loans are not free money; nothing in life is free! Payday loans in particular are renowned for extortionately high interest rates and if you do a basic comparison between the companies you will see that if you were to borrow, for example £100, the best deal out there will expect you to pay £125 back to the company. 25% interest rate on a loan that only lasts 30 days is absurd and ultimately you will end up worse off.

The major companies are all competing with each other to offer the best deal but the difference between the exact amount of money lent and returned is miniscule and therefore it is all about exposure and customer services. The greater exposure the company receives the more people are likely to borrow from them and this creates, in theory, a perpetual cycle of popularity and success. Therefore all of the companies offer the same ridiculous interest rates because they have to make money, that’s the basic rule of business and in order to gain said exposure initially they have to pay to advertise.

So, if you do find yourself in the position of needing a short-term loan are these companies the best way to get that money? The easy answer is no because the interest is so high and the pay-back time so short that the implications of a late payment is grave. However, this is easier said than done when you have bills to pay and mouths to feed. It’s also easy to recommend a budget that you stick to; look at how much you need each month and strive to stay within those boundaries but that again is easier said than done. When you do find yourself in the position of needing to borrow money from a payday loan company check the following things: how long the loan is for, exactly how much you need to borrow and don’t borrow anymore, how much the interest is going to be, how much extra interest will be whacked on top of the pay back total if you are late paying it back and how reputable the company is. Have a look on their websites, they all have review pages now and you can see how other customers have faired with them.

For more information, speak with the Wonga customer service department.