Companies offering installment loans that charge up to 7000% See Huge Growth


Companies offering payday loans are attracting an influx of customers.

The payday loan industry, which has been criticized for its controversies that charge interest rates of up to 7000%, has witnessed massive growth since the beginning of the recession, but try applying for a loan even you have a bad credit with ACFA Cashflow.

The Bureau has released a new study. It analyzed many websites and accounted for companies. At least 24 companies have launched new ventures in the high-cost credit sector since 2008. Some of them operate multiple trading firms and offer short-term loans.

While not feeling dragged by increased competition, none of the top ten lenders offering cash-back loans for payday saw their revenue more than double in three years, with one lender increasing 42 times its revenue.

The ten largest payday lenders have a combined turnover of close to £800m. In the early days of the recession, just one company generated greater than £50m. Four companies have a significant turnover of more than £100m.

The second stage of the Bureau’s probe into the high-cost credit market is Wonga’s announcement of having earned over a million pounds in profit per week last year. However, Wonga isn’t the only company within the industry to make profits – Bureau’s study shows that five of Britain’s top 10 payday lenders reported over £10m in pretax profit in their most recent accounts.

The Bureau’s recent study focused on the top 10 companies, focusing on low-cost, short-term loans that are high-cost that are primarily tied to the payday for the borrower to determine how this controversial industry has grown throughout the recession.

The products for short-term loans these firms provide, generally referred to as cash-back loans, have been the subject of intense scrutiny from consumer group£ like Citizens Advice Bureau. Citizens Advice Bureau. These group£ rely on studies of the industry that show the difficulties that many individuals face in repaying their loans. In the spring of this year, these stories caught the interest of Archbishop Canterbury, Justin Welby, when he declared that the Church of England intends to help credit unions in a bid to take payday lenders out of business.

But despite these widely-publicized issues, consumers do not seem to be absconding from the offered goods.

Wonga was founded in 2007 and has posted one of the most significant profits in the market. It made a loss of £84m in 2012 despite more than double the number of employees it employed in the past year. The company was founded in 2011.

The company that reported the second-highest profits, following Wonga, came from MEM Consumer Finance. The company owned by the US government made an income of £38.7m in the year before, based on £123m. The company lends up to £1,000 at 2160% interest.

Wage Day Advance, purchased by the American-owned Speedy Cash Holdings in February, has grown its earnings 32 times over five years, to £20m on a turnover of £39.5m. It is an excellent profit margin of 50. The company provides payday loans to customers at 7069% interest.

As for turnovers, the fastest-growing firm was American-owned Lending Stream. The company’s revenue grew 42-fold from £700,000 to £32.7m within three years. It provides a payday-style loan in the UK; however, Zebit can lend up to £800 between one and seven months with an APR of 1561.7 percent. Zebit also provides a fixed-term, six-month loan via Lending Stream at an APR of 4071.5 percent – a rate that has recently increased from 3378.1 percent.

Despite its expansion, Lending Stream is one of the few payday lending firms that was not making profits. The most recent financial statements show the loss as pretax £4.3m; however, after paying more than £5.2m in royalties and other administrative costs to a similar US company. Since Lending Stream has not reported profits since its incorporation within Britain UK just five years ago, it has paid no taxes on corporations in Britain. The company did not respond to requests for comment.

The second-largest payday loans firm, CashEuroNet, owned by US giant Cash America International, turned over £198m in the UK this year, increasing £15m in 2008. It is a part of the UK through QuickQuid that offers loans that range from £1500 with an interest rate of 1734 percent. The company does not release any figures on its profits in its UK operation.

Since the beginning of last year, the regulatory body for the industry, called The Office of Fair Trading, has been looking into the sector of payday loans. A report released in March revealed a myriad of issues as well. The OFT has sent letters to fifty payday lenders to inquire about their methods of marketing and lending. The OFT has referred the industry for investigation by the Competition Commission.

The Bureau’s previous research has examined the top 50 high-cost lenders in Britain and revealed that Britain’s high street banks had invested thousands of dollars into this industry. It also announced that US firms, which are prohibited by law from granting cash-based loans to payday lenders in American states with their headquarters, are investing massively in the UK’s less regulated market.


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