Bishop of Durham said payday loan rates sinful

Posted in Debt, Loans on Wednesday, May 16th, 2012 at 11:01 by Sarah Evans.

The Bishop of Durham has spoken out about the interest charged for payday loans.  The interest rates have reached 4,000% from some of the companies operating in the UK.  Wonga is one of the companies named as one of the worst companies, with a 4,214% interest rate on a short term loan.  Many families are desperate for money right now, which is why they head towards payday loans to get through each month to the next pay cheque.  When there is an interest rate of 4000% it is near impossible for any borrower to pay it back even when they pay the loan on time.  It is nothing more than a bad loan option that should be avoided; however, many have bad credit and thus seek the only alternative, which tends to be the bad credit loans in the form of payday loans.

The Bishop stated that he was shocked about the numerous individuals who currently have to go to a food bank.  It should not be something that happens in this day and age, given the advancements that have occurred.  Unfortunately, this does not seem to be the case as many residents are struggling with their monthly payments, needing food, and going for payday loans that make the situation worse.

Wonga did not comment about the Bishop’s statement.  They did state, however, that they do what they can in the current society to provide credit and that they urge their consumers to use the credit in a responsible way, but that they cannot determine how the money is used by the consumers once it is in their pockets.

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