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11/11/2014
FCA Introduce Caps On Payday Loan Charges
The financial regulator has announced a series of caps on charges used by payday loan firms.
The caps, introduced by the Financial Conduct Authority (FCA), include:
• 0.8% per day interest – lenders cannot charge more than 0.8% interest on a loan. For example if a customer borrows £100 over 30 days and repays the loan in full, interest charged will be £24.
• A one-off default fee capped at £15 – customers can only be charged £15 for failure to repay a loan on time.
• A total cost cap of 100% of the loan – should a customer default on a loan, the lender can continue to charge interest but only up to twice the amount that the customer borrowed.
The FCA said that the new regulations will come into force from January 2015.
(MH/JP)
The caps, introduced by the Financial Conduct Authority (FCA), include:
• 0.8% per day interest – lenders cannot charge more than 0.8% interest on a loan. For example if a customer borrows £100 over 30 days and repays the loan in full, interest charged will be £24.
• A one-off default fee capped at £15 – customers can only be charged £15 for failure to repay a loan on time.
• A total cost cap of 100% of the loan – should a customer default on a loan, the lender can continue to charge interest but only up to twice the amount that the customer borrowed.
The FCA said that the new regulations will come into force from January 2015.
(MH/JP)
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