TxtLoan charges an APR of 994% for borrowing £100 over seven days

There are dozens of loan companies in Britain, but there is a new one that caught our attention. Their characteristics made us write this entry. Why is it so special?

Firstly, the loans it offers have to be requested via text SMS. TxtLoan is a hi-tech version of the “payday loan” providers that offer their services on Britain’s streets.

Secondly, TxtLoan promises it can get the money into people’s bank accounts within minutes, but it charges an APR of 994% for borrowing £100 over seven days! Besides, additional costs can quickly rise if the borrower doesn’t repay within one week.

The company says it is a responsible lender and its customer selection process is stringent: only about 10%-15% of people who apply will get a loan. It has already helped supermarket shoppers who discovered they were out of cash just at the checkout point, or people with unexpected costs, such as urgent car repairs.

Even so, at We Love Mobile we think the interest rates they offer are extortionate and they take advantage of users’ urgent necessities. Consumers could demand cheaper loans or use their credit cards to get the money they need.

We think there are better mobile services to be offered, and this kind of loan is not on our future business plan! We want users to trust mobile and the possibilities it provides, not think of it as another channel for fleecing consumers.