Speedeloans is an award-winning UK payday lender that offers one of the lowest loans APR in the industry. It offers instant lending decisions and funds loans within two hours for borrowers who need money quickly.
The CEO of this reputable lender recently voiced his support for governmental capping of payday loan costs. This move is commendable, since industry regulation will directly impact profits for his company.
In a statement released on Friday, Speedeloans CEO Gary Miller-Cheevers noted the need for a “well run and tightly regulated” market for short-term financing.
He said his company supports politicians interested in protecting UK citizens from “unscrupulous lenders.” MP Stella Creasy is one of those politicians.
Her highly visible campaign is pushing for interest rate caps on products like payday loans. She wants to stop establishments she refers to as “legal loan sharks.”
Last week, Scottish National Party MP Alyn Smith blasted British Prime Minister David Cameron regarding the proliferation of disreputable payday lenders.
Mr. Smith said that the Prime Minister and “his cronies must get their act together.” Otherwise, he fears that more UK citizens will find themselves in a financial nightmare after using payday loans.
In Mr. Smith’s opinion, unscrupulous payday lending companies must be regulated out of existence.
Mr. Miller-Cheevers suggested that expressing loan costs in GBP terms instead of loans APR would help customers compare short-term financing costs more easily.
He believes that APR and the EAR typically quoted for a bank account overdraft can be both confusing and misleading to customers.
The EAR represents the actual annual interest rate but does not include account charges and fees, while APR does. With the two terms not including equivalent items, it is difficult to accurately compare different types of short-term borrowing.
The Speedeloans CEO also suggested that transparency in all forms of borrowing might deserve a second look. He noted that his company aims to provide transparent service to its customers, ensuring that each one is aware of payday loan costs before committing to this financing.
Mr. Miller-Cheevers also revealed that his company recently began scrutinizing customer financial situations in more detail. It now rejects customers with high debt levels and those who have taken multiple payday loans from questionable lenders.
The average payday loan from Speedeloans is GBP250 and features a 19-day term, costing slightly more than GBP50 in interest, fees, and other charges.
Taking an unauthorized overdraft from the Bank of Scotland-Halifax costs GBP5 daily. For a GBP250 overdraft for 19 days, this would equate to an unauthorized overdraft charge of GBP95 and a GBP10 charge for a bounced item. These charges and fees are twice those imposed by Speedeloans.
With the support of at least one provider of payday loans, the government should feel more comfortable moving forward with industry regulation.
Payday loans are designed as a cost-effective solution to emergency needs for short-term loans and when used responsibly, they are very helpful.
Disreputable payday lenders profit from the financial misfortunes of UK consumers and it is agreed that this must stop.