Or, if we keep people in jobs and pay them enough to live on, they could spend money they have got.

Have you posted this on the correct thread.

From my experience, most savers save money they have got. In fact I can't think of one person who has borrowed money in order to save it

People say this, but look at it closely. The loads are all intended to be very short term (most ads of this type state this clearly) and the target market is generally high risk, low income. These loans are intended to be 'borrow £200, pay back £250 in a week', not 'borrow £200 and pay it back over the next 12 months at 2000% APR'.

Of course the rates will be sky high - they're exposing themselves to a potential high risk each time they lend and they're well within their rights to do so. It's easy to say they're 'preying' on people, but the facts & figures & repayment costs are almost being shouted from the websites and are very clearly stated. Yes, they're making money out of desperate people but the only real argument against it is a moral one. Would a street loan shark be better?

That said, if someone is in such a situation they desperately need £200 right now, the question has to be asked - can they actually afford to repay £250 next week or is this the start of a vicious spiral? As with any loans, a certain number of people will fail to manage their debt and end up in trouble - except the consequences are far more costly far more quickly at these rates.

I understand the principle behind it, but I think the rates are ridiculous - immoral, even. A 50% APR would allow for the high risk nature of the lending, and they could perhaps introduce a one-off fee to make it worth their while from a business perspective. So, for example, if you borrow £200 you have to pay £250 back, and if you don't pay it back in time, it starts accruing interest at 50% APR.

What they're doing is sucking desperate people in, knowing that a percentage won't pay it back in time and will have to pay 4000% APR until they do settle up. And it's ok saying that the terms and conditions are on the websites, but many people won't appreciate just how bad things will get if they don't pay, until it's too late.

The only difference between these companies and a street loan shark is baseball bats.

No they are not, what is ridiculous is converting short term loan rates into APR.

As an example, you are down the pub with your mate, you ask to lend £20 till next week, you repay him and buy him a pint, a fair deal? Try calculating that as an APR and it comes out as stupid amount.

There has to be some personal responsibility here too, people only get themselves into a mess because they take out the loans, not because firms like Wonga force money on them.

The only irony I see on this thread is so called lefties bemoaning the fact that Damo won't voluntarily become a wage slave. If he genuinely does volunteer work what makes that work less valuable to society then stacking shelves in a supermarket?

I don't disagree, but perhaps those APR rates exist as a threat, and as a reflection of the risk these lenders are taking.

If Charlie the Chav has blown his wage on City vs Arsenal and needs £100 to get through the month, he can go to a payday lender and borrow £100 for 7 days with a £25 charge. He knows he probably won't be able to pay it back and 50% APR on such a small amount is peanuts. He doesn't care. However, the threat of that small amount exploding massively in no time is the whip to ensure repayment in most cases - and of course it makes the lender a tidy sum if Charlie doesn't repay in time.

At least if someone finds themselves owing thousands to a payday lender due to horrible mismanagement of their money, or just plain fricking stupidity, there are debt management schemes around. A street lender wouldn't be so sympathetic.

But, using your example, if you don't buy your mate a pint the following week, he won't start adding pints until it reaches the stage where you have to keep him in beer for the rest of his life.

As I said, I don't have a problem with them making a decent amount on a short term loan. If they want to charge £50 for a one week loan of £200, fine. What I have a problem with is what happens if the loan isn't (for whatever reason) paid back on time. I don't think it's right or moral to keep piling interest on top at the same huge rate until a £200 loan becomes a crippling debt for the individual concerned.

I appreciate what you're saying about personal responsibility too, but not everyone has the intelligence or common sense to work out what the consequences might be if they don't manage to make the payment on time. And sometimes people are just desperate - is it morally right that companies should add to that desperation for the sake of a quick buck?

I note he hasn't expanded on that statement.

Damo's idea of 'voluntary work' probably differs to the rest of us. He probably sees getting out of bed as work on a voluntary basis.