Back in January people learned that they could send donations via their cell phones to help the people of Haiti during the catastrophic earthquake. Since then the public has become increasingly aware of the cell phone as a tool for monetary transactions. Now there is TxtLoan. This TxtLoan review will tell you a little bit about this service.
They lend small amounts of money for short periods of time. They have simplified the process so that once the initial registration is done the loan process is almost instantaneous. You send them a text message with your pin number and the money is sent to your bank account.
Even though the loan process is simple not everyone is qualified. Although subprime lending recently became almost the norm in certain parts of the world that’s not the clientele they are wooing. They want customers who are able to repay.
Their requirements to qualify are pretty straightforward. Applicants must live in the UK and have a UK bank account and debit card. They have to be 18 years of age or older and have a job. Their income has to be at least 400 pounds per month. They need a mobile phone and an email address.
They offers loans of 100 pounds for seven days. That’s all. That’s one of the reason it’s so simple. There’s not a lot of discussion or debate or calculating about how much over what period of time. It’s 100 pounds. When the loan is paid back within seven days the charge is ten pounds. You pay a total 110 pounds.
This sort of loan appeals mostly to younger people between the ages of twenty and thirty. According to this SMS loan lender, their customers have an average income around 25,000 pounds. Most of their customers pay back their loans within seven days. About 10 percent do not.
Those ten percent discover the downside of an easy, convenient loan. The website spells out what they call the Credit Cycle. It’s not a party you want to go to. If you pay back the loan by the seventh day all is well. On the eighth day they will collect 110 pounds. If that amount isn’t available to them they will send you and overdue notice on the ninth day.
The overdue notice brings with it news of and additional charge of twenty-five pounds bringing our total up to one hundred thirty five pounds. On the eleventh day you will be informed that you now owe one hundred sixty pounds. On the twenty third day the total is up to two hundred pounds.
Loan totals continue to escalate and eventually the loan is turned over to a collection agency who will add their own fees. They say their charges work out to an APR of nine hundred ninety four percent. They hasten to point out however that talking about APR on short term loans really doesn’t make much sense. In fact the amounts they lend are small and their charges are spelled out.
Txtloan is convenient and could be a life saver in the event of a real emergency. Paying ten pounds for a Txtloan could be a good investment if it saves you having to pay an overdraft fee or late payment penalty or keeps you out of gaol. It’s not good for buying things you can’t afford anyway.
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