ANTI-POVERTY campaigners hit out at greedy lenders last night after it emerged they were charging interest rates of up to 2.6MILLION per cent.
Early Payday Loan set the sky-high rate on a cash advance of just £320.
Government minister Angela Smith said she was "horrified" to learn of the extortionate charge when it was revealed in the House of Commons.
She told MPs: "We all share concerns about this because it is often those on the lowest incomes who end up paying the highest prices because of the high cost of borrowing."
Last night, Labour MP Jim Devine, who is campaigning for interests rates on loans to be capped, said it was further proof of how lenders can take advantage of people who are struggling for cash.
He added: "I'm absolutely appalled that this company are charging such exorbitant rates of interest and it reinforces the need for a limit to be imposed.
"With Christmas just around the corner, increasing numbers of hardworking families on low incomes will be tempted to take out short-term loans to buy presents for their kids. This shows how wary they should be before they sign up."
The Livingston MP, who plans to take up the matter with Business Secretary Peter Mandelson, said those on low incomes should instead join their local credit union, who can offer loans on much cheaper terms.
On their website, Early Payday Loan say arranging a loan with them "takes just a few minutes".
They add: "Once you have filled out our short application form, your payday loan could be in your account in a matter of hours.
"We pride our selves on providing our customers with fast cash loans into their account with minimal hassle when they need it most!"
A copy of the credit agreement in question has been seen by the Daily Record.
It says: "The APR in respect of this service is 2,639,538.9%."
Last night, the company denied the interest rate was actually as high as that and said the figures quoted in the loan agreement "could possibly be the result of a technical error".
According to the credit agreement, the interest rate on the £320 loan was 25 per cent as long as the borrower repaid a total of £400 within a month.
The higher interest charge would kick in if the loan was not repaid in full and on time.
But Peter Kelly, director of Glasgow-based Poverty Alliance, said it showed the dangers faced by Scots searching for easy credit.
He added: "This is obviously a very extreme example but it shows how careful borrowers need to be before they take out an emergency loan."
origional story here
Shocking that they can prey on the low paid like this.
thebigman
Early Payday Loan set the sky-high rate on a cash advance of just £320.
Government minister Angela Smith said she was "horrified" to learn of the extortionate charge when it was revealed in the House of Commons.
She told MPs: "We all share concerns about this because it is often those on the lowest incomes who end up paying the highest prices because of the high cost of borrowing."
Last night, Labour MP Jim Devine, who is campaigning for interests rates on loans to be capped, said it was further proof of how lenders can take advantage of people who are struggling for cash.
He added: "I'm absolutely appalled that this company are charging such exorbitant rates of interest and it reinforces the need for a limit to be imposed.
"With Christmas just around the corner, increasing numbers of hardworking families on low incomes will be tempted to take out short-term loans to buy presents for their kids. This shows how wary they should be before they sign up."
The Livingston MP, who plans to take up the matter with Business Secretary Peter Mandelson, said those on low incomes should instead join their local credit union, who can offer loans on much cheaper terms.
On their website, Early Payday Loan say arranging a loan with them "takes just a few minutes".
They add: "Once you have filled out our short application form, your payday loan could be in your account in a matter of hours.
"We pride our selves on providing our customers with fast cash loans into their account with minimal hassle when they need it most!"
A copy of the credit agreement in question has been seen by the Daily Record.
It says: "The APR in respect of this service is 2,639,538.9%."
Last night, the company denied the interest rate was actually as high as that and said the figures quoted in the loan agreement "could possibly be the result of a technical error".
According to the credit agreement, the interest rate on the £320 loan was 25 per cent as long as the borrower repaid a total of £400 within a month.
The higher interest charge would kick in if the loan was not repaid in full and on time.
But Peter Kelly, director of Glasgow-based Poverty Alliance, said it showed the dangers faced by Scots searching for easy credit.
He added: "This is obviously a very extreme example but it shows how careful borrowers need to be before they take out an emergency loan."
origional story here
Shocking that they can prey on the low paid like this.
thebigman
