Loans and Finance

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Wednesday, March 05, 2008

100% Interest Rate

As the blow back from the credit crunch hits the ordinary person in the street, some loan companies are making a killing out of people's financial misery by offering loans with a crippling 100% interest rate.

Seemingly up to two million people have taken loans, with punitive interest rates of up to 100%, from Provident Financial.

Provident Financial, is Britain's largest door step lender, it sells small loans door-to-door.

In 2007 it reported pre tax profits of £115.2M. Peter Crook, Provident's chief executive, said that the outlook for 2008 looked good fro Provident at any rate:

"Current market conditions are favourable for us, as mainstream banks continue to tighten their lending criteria."

Many of Provident's customers borrow around £400, and pay 100% interest on their loans.

The sad irony is that if legitimate (if somewhat "high charging") companies such as Provident ceased to exist, those desperate borrowers who use them would end up in the hands of the loan sharks.

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