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Loans -
Door-stop lenders cash-in on poor credit - 06/03/2008
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Two million people have taken loans with interest rates of upto 100 per cent from doorstep lenders who accept those with poor credit history.
The number of potential clients for these loans has swelled in the past year as banks introduce stricter rules on those they will loan to. Those refused loans and credit cards by major high street banks is estimated to stand at around 10 million.
Provident Financial, one of the biggest doorstep loan comapanies, announced a magnificent 2007, with profits up almost 11 per cent to £115.2 million pre-tax to the year end. Provident's Cheif Executive Peter Cook added that the outlook for 2008 was equally positive.
Debt charities are far from happy at seeing companies such as Provident from charging such high rates, but accepts that in not levying default charges on those that miss payments, their trading practices were reasonable.
Frances Walker, of the Consumer Credit Counselling Service said: It's a very difficult issue and while I don't want to say doorstep lenders are great, I would be concerned that if you took them out of the equation, the alternatives are illegal loan sharks."
Provident is not the open to all service that it seems however as Vanquis, the company's credit card, now rejects 70 per cent of applicants as it recorded a £900,000 loss last year in the same period.
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