Cash Genie have been offering payday loans for a number of years now. As such, they can allow you some breathing space if you have debts that need paying. However, they are not intended to be a permanent solution. As a responsible lending company, they know that it is best for their borrowers if they are only used as a last resort, and even then only once. The best scenario is to lend the cash to tide people through their problems, but also to give them the skills they need to avoid coming back again.
To a degree, this is actually good business sense. There’s a saying: you can skin a sheep once, but you can shear it many times. It is some lenders’ purpose to keep their clients in debt forever (think your friendly neighbourhood doorstop lender…), thereby collecting the interest indefinitely and ensuring that you are never free. However, this approach (and the broken legs that can come as part of the deal) has to be balanced again the probability of defaulting.
Cash Genie works on a 30-day basis. Their loans are for one month only, and the charge is 30 percent. This is a lot compared to high street banks – if you can secure a loan from them. However, it might be cheaper than the alternative (missing a payment or bill and getting fined, for example). In any case, the loans are not meant to be long-term. The idea is that you have access to the money you need to get you out of temporary financial problems – and don’t come back the next month. In particular, rolling the debt over for another month is a very bad practice, especially if that continues for several months. A debt of £100 would become £130 by the end of the first month, £169 by the end of the second, and £2,330 by the end of the year. (In practice, you are limited to £750.)
Put simply, someone who uses a short-term loans company again and again is probably someone who isn’t very good with money. In other words, they are someone who is more likely to default on their debt, and that’s not good for the client or for Cash Genie. It therefore makes sense to appeal to the sector of the market who need a loan because of temporary adverse circumstances – not through any inherent financial illiteracy.
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