The Financial Conduct Authority (FCA) have now forced the payday lenders to increase their affordability checks and cap their charges. Meaning that:
Default loan charges are now capped at £15 while interest is capped at 0.8% per day of the full loan amount.
The total amount payable has been capped at 100% of the loan amount, for example, if you took out a payday loan of £100, the maximum you have to pay back is £200.
Payday loans were meant to offer clients access to quick and “easy” cash on a short-term basis with a huge margin return and ridiculously high APR’s.
Before January 2015, many payday loan companies did not have to limit the interest rates it charged customers. We are disgusted to report some as much as 7000% interest.