Credit laws will hurt battlers

CASH Convertors has attacked proposed legislation to put a 48 per cent annual cap on short-term loan and interest charges.

Credit laws will hurt battlers

CASH Convertors has attacked proposed legislation to put a 48 per cent annual cap on short-term loan and interest charges.

It says the State Government's proposed cap will mean short-term loans will no longer be viable for lenders.

Cash Converters general manager Ian Day said his customers on average borrowed $250 at a time to cover "basic necessities'' such as medicine, food and bills, and loans were usually repaid within 30 days.

"The South Australian Consumer Affairs Minister, Jennifer Rankine, has herself been quoted in the press saying that payday lenders look attractive because the customers are unable to get credit from mainstream lenders,'' he said.

"This is exactly our case. The introduction of capped interest and charges will result in lenders no longer being able to provide short-term cash loans, leaving thousands of South Australians with no ready alternative.''

Banks' personal loan rates are typically between 12 and 14 per cent, with application fees costing between $120 and $250.