Monday 24 July 2017

Interest rates of up to 187pc legal

Charlie Weston

Charlie Weston

There are 38 moneylenders licensed by the Central Bank to conduct business in this country.

And some 360,000 people use the services of these door-step lenders. Most of these people are low-income consumers and regarded as financially vulnerable. The provision of these loans online is a growing trend.

Moneylenders are legally allowed to charge interest rates as high as 187pc, when the rate is expressed in annualised terms. Adding in the home collection fee takes the rate to 288pc.

However, most of the loans are for less than a year, which means those pushing the loans can claim the interest rate is lower.

A loan over 46 weeks will have a simple interest rate of 40pc. But expressed in annual percentage rate (APR) terms, the rate is 128pc.

Most people borrow between €200 and €300, with many opting to have the repayments collected from their home for a fee.

Irish Independent

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