Rip off loans

Watch out for rip off loans, I've heard recently of offers with an annual percentage rate (APR) of up to 1000% yes, one thousand percent!

One company operating in the UK loan market is promoting SMS text based loans where the funds can be delivered electronically into your bank account in a few minutes.

Registration for an account can be done via the web and they the details used to text for a simple quick loan of £100 whenever it's required.

The big drawback, and it's a big one, the charging structure runs at almost 1000% APR level. This means that it will cost £10 plus a £1 admin fee to use the service.

So borrowing £100 today you will pay back £110 in a weeks time. However, the total cost will jump to £135 if the borrower fails to repay the loan in the week.

You'd be well advised to not to be late. The fees continue to shoot up should payback be late. Expect constant reminders and high admin fees.

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