THE Bishop of Durham has slated payday loan deals which can charge interest of more than 4,000 per cent.
The Rt Reverend Justin Welby said the interest rates are “terrifyingly high” on the loans which are increasingly being used by hard-up families to make ends meet during difficult financial times.
He said: “The reality is interest rates in the thousands of per cent, which at any time in history would have been called usury.
“It is a sin to charge that level of interest. It is just morally wrong and you can trace that back to Old Testament times.”
Online payday loan deals can be completed in under an hour. For example, borrowing £250 for 14 days would see the lender repay £290.78 at an APR of 4,214 per cent.
The bishop said it is now time action was taken and help made available so people can avoid these high interest rates being charged by loan firms.
He also blamed the major banks for the financial crisis and recession, saying: “What happened before 2008 is that the banks became the greediest of the lot, and the most self indulgent of the lot. There is no doubt about who is responsible.”