Personal Loan News Articles

"Payday loans" company Wonga has agreed to limit a tactic that allowed short-term borrowers to rollover their loans.

Wonga borrowers agree to pay back the loan after a fixed time, usually a matter of weeks, with a fixed fee and interest payment. The problem has been that many people who borrow in this way are doing so as much through a lack of income or excess of expenses rather than as a purely cashflow-related issue.

This means they are often unable to pay back as scheduled and instead are forced to roll-over a loan, meaning they are hit with a fresh set of charges. The company has now agreed to a code of practice that means it will do this a maximum of three times.

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An estimated seven million people in Britain are taking out additional debts in order to meet their mortgage or rent payments. Around a million are relying on payday loans intended for short-term borrowing only.

The figures come from homelessness charity Shelter and cover personal loans, credit card borrowing and unauthorised overdrafts; they don't include people who use authorised overdrafts to pay off their home costs. They are extrapolated from a survey of just over 4,000 people.

Shelter warned that short-term payday loans were Read Full Story

Short-term loans company Wonga has agreed to scale back its marketing to students. It's removed an article that implied the student loan system can encourage students to get into debt.

The site came under particular criticism for what appeared to be hypocrisy. It blamed students loans for encouraging students to live beyond their means and "fritter away the money." However, it also suggested Wonga was a suitable option for buying "plane tickets to the Canary Islands" before payday.

According to Wonga, the article has been removed because it "does not actively target students as potential customers." It says the page was designed primarily for search engine marketing Read Full Story

A new survey suggests millions of Brits are likely to take out short-term loans to bridge the gap between paydays. But those in the industry have disputed the figures.

The survey found that 45% of people struggle to make money stretch to the next payday, a figure that's 62% for those aged 24 to 44. It also found one in six people only pay the interest on their debts and make no inroads into the balance itself.

The chief executive of the Consumer Finance Association questioned how accurate the figures are, saying that only half of people use any credit in the first place.

The government says it is working with consumer groups and the credit industry to tackle potential problems in the industry. Read Full Story

The majority of people buying a new car now do so using some form of borrowing provided by the car dealer rather than a bank or other source. The Finance and Leasing Association says 57.9% of buyers across the past 12 months did so on credit in the "forecourt finance" category.

The overall number of cars bought on finance in August was up 17 percent. The biggest rise was in leasing deals, in which the customer pays a lower monthly fee but does not take ownership of the car and instead can return it later or upgrade to a new model.

There was also a big rise in Personal Contract Purchase, a similar scheme by which customers pay Read Full Story

Consumer group Which? has reported three payday loan companies to government agencies over alleged breaches of consumer law.

The group, previously known as the Consumers Association, reported Paydaykong and Swiftmoney to the Office of Fair Trading, the former for allegedly operating without a licence and the latter for not showing the APR for its loans on its website.

It also reported Casheuronet, which operates two separate online lenders, to the Information Commissioner's Office after it appeared to pass on an applicant's details to third party marketers.

Which? made the complaints after carrying out an investigation into the payday loans industry. It says it found widespread problems Read Full Story

A new survey suggests the average person spends a quarter of their income on repaying personal debt -- a figure that doesn't include mortgage payments.

However, the claims by Money Supermarket don't appear to add up. The quoted figure is £322 a month, which would mean average income was around £15,500, far below most estimates.

More worryingly though, the survey asked individuals about their personal situations and found one in four people spend more than 40% of wages on personal debt, while one in twelve claimed to spend 80% or more.

The figures also showed the average total personal debt was £8,055. That's prompted financial advisers to suggest a range of Read Full Story

UK consumers appear to be putting the brakes on added borrowing according to new figures. It could mean better deals for those who do need to borrow.

The British Bankers Association has revealed that the total debt on consumer overdrafts and personal loans was at £52 billion in July, the lowest figure for a decade. That's even more significant than it might appear because of dramatic inflation rises over that period.

Meanwhile figures for the month showed the unusual pattern of credit card users repaying more money overall than they borrowed in new spending. The BBA believes that both sets of figures suggest consumers are trying to pay down debts -- and make interest payments more manageable -- rather than splash out on new credit-fuelled spending.

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Brits are becoming more worried about debts, with almost half of people expressing concerns.

Quarterly figures from the insolvency trade organization R3 found that 47% of people said they were worried about debt, a figure that compares to 40 percent in the same period last year. That's had a knock-on effect with an estimated 13 million people reducing the amount they save.

There has been a change in the nature of the worries though. Credit card worries have now become more common, as have those relating to short term or payday loans, hire purchase and store cards. Meanwhile fewer people are concerned about mortgage repayments and traditional bank loans.

That's almost certainly related to the ongoing freeze on the Bank of England base rate that means Read Full Story

April's court defeat for the bank industry over payment protection insurance claims has led to a flurry of new complaints.

The Financial Ombudsman Service has revealed that between April and June this year, there were 56,000 PPI complaints. That's around 900 a day, more than double the rate in the same period last year. In all, PPI was the subject of almost 70% of all claims to the ombudsman, almost 10 times as much as any other area of finance.

Not all of the additional claims are justified though. During the April-June period, 55% of PPI claims were upheld. That's down from 66% in the 2010-11 financial year and 89% for 2009-10. But even with that drop, PPI remains one of the subjects more likely to have complaints upheld, ahead of topics like mortgages Read Full Story