11 February 2023 , 20:02
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Cynical payday lenders are targeting cash-strapped folk ahead of Valentine’s Day by pushing “loans for lovers” with an interest rate of 1,269%.
Lender CashASAP’s website declares: “This is a special time, and you deserve to mark it with a wonderful evening.”
But borrowing £400 over just six months will cost £702.43 to repay, according to the lender’s own example illustration.
The website adds: “Unsecured payday loans provide extra cash to bridge the gap between now and your next payday. However, make sure you’ll be able to pay the online loan back.”
Meanwhile, Croydon-based online lender Fernovo is promising a 25% “love day” discount on loans taken out in February.
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Its blurb reads: “At Fernovo, we know showing your Valentine's how much you love them can cost a packet.
So if you want to make the day extra special but are a bit short of funds, we’ve shown you our love by offering a special 25% discount.”
Small print at the bottom of the lender’s marketing emails tells punters loans will cost 986% APR.
While this is down from the standard 1,244% APR stated on the firm’s website, a £300 loan over 90 days will still cost £439.14 to pay back, even with the discount.
Money adviser Sara Williams, of website Debt Camel, said: “Taking out a payday loan to pay for a Valentine gift or night out isn’t romantic, it’s insane.”
And independent consumer expert Martyn James said it was “morally reprehensible to encourage people to get in to debt during a cost-of-living crisis”.
He added: “This is another reminder the payday loan industry hasn’t gone away.”
Neither lender responded to requests for comment.