Debt help

PAYDAY LOAN CAPS INTRODUCED BY THE FCA

The Financial Conduct Authority (FCA) has introduced new caps to the payday loan industry set to be introduced in January 2015.

Interest charges are capped at 0.8% a day. This means anybody borrowing £100 for 30 days would pay a maximum of £24 in charges.

Fees for late payments will be capped at £15, with a total price cap of 100% of the original loan to stop default charges spiraling out of control.

The FCA’s changes comes a day after Wonga’s newly appointed chairman Andy Haste announced he was axing their puppet adverts in an attempt to clean up its act. Haste said he expected the new caps would mean Wonga would be a smaller and less profitable business in the short-term.

The new caps will mean that most payday lenders will have to reduce their charges. At the moment, borrowing £100 for 30 days with Wonga will cost £37.15 in fees. The Money Shop charges £29.99.

The FCA looked at other countries where restrictions on payday lending operate such as Australia where interest rates are capped at 4%.

However, the industry has warned that the experience in Australia has not been good.

Russell Hamblin-Boone from the Consumer Finance Association (CFA) said: “The evidence from other countries is that people either turn to illegal lenders – the back-street loan sharks – or more likely, they’ll go to online lenders who are operating outside of the UK.”

The FCA admitted that it expects the payday loan industry to become smaller once the caps have been introduced next year.

The FCA said some people will no longer be able to get the loans they got previously, but after an initial short-term period, they would be better off without them.

If you’re struggling repaying payday loans or any other debts, call us today.

The Debt Advisor can advise on all kinds of debts and provide a solution tailored for you.

Call today on 0800 0851 825 or visit www.thedebtadvisor.co.uk for more information.

PAYDAY LOAN CAPS INTRODUCED BY THE FCA

Do you need help?

Specialist advisors are available who can advise you on the most appropiate solution to bring you relief from debt

More Posts From The Debt Advisor

CREDITOR ACTION – WHERE ARE WE UP TO?
Beverley Budsworth – The Debt Advisor FCA regulated Debt Solution Provider Judgments increasing against consumers Judgments in first quarter of...
Debt Relief Order changes – more people will qualify
The criteria to qualify for a Debt Relief Order “DRO” changes on 29 June 2021.  This will mean that around...
Mental Health – How to help yourself recover “Post Pandemic”
Mental Health - How to help yourself recover “Post Pandemic” PPSD* (post-pandemic stress disorder) Not (yet) an official term but...
Breathing Space debt respite scheme
What is Breathing Space? From May 4th 2021 new legislation will be brought into place to allow approved debt advisers...
How to improve my Credit Score?
Within the UK there are 3 main credit reference agencies, TransUnion, Equifax and Experian. All 3 work with banks, building...

We are proud of our 5* TrustPilot customer reviews

We are proud of our 5* TrustPilot customer reviews

The Debt Advisor Accreditations

There is an alternative free-to-consumer debt services from the Money Helper.

The Debt Advisor Accreditations

There are alternative free-to-consumer debt services from the Money Helper.

We’re ready to help with any debt problems

Social media

The Debt Advisor has a long and rich history of helping people and companies get past their debt problems. We welcome people to get acquainted with our company, history, team and to listen to the stories from the people we have helped.

Alternative free-to-consumer debt services are available from the Money Helper website.

Customer Support

18-22 Lloyd Street, Manchester, M2 5WA

Monday to Thursday: 9:00 am – 7:30 pm
Friday: 9:00 am – 3:30 pm

Company Registration: 06248441 | The Debt Advisor Limited is Authorised and regulated by the Financial Conduct Authority Reg No: 659920.

All debt solutions should be very carefully considered. Please note, if you are struggling with debt issues and need advice on your options, we’ll take a look at your financial situation and explain the available options. If it is appropriate to refer you to one of our trusted providers for a solution, we may get a fee for introducing you, or for the preparatory work we complete. Fees are payable if ongoing services are provided.

Copyright © 2022  The Debt Advisor | Privacy Policy | Cookie Policy | Complaints | Careers