21 Jun 2011

Social group criticises loan via text service

1:51 pm on 21 June 2011

A South Auckland social services agency has criticised a finance company for providing a loan through a text service, saying it is too easy.

Ferratum, a global company that has just entered the New Zealand market, offers instant loans of up to $600 that can be applied for by text message.

Interest rates range from 91% for $100 borrowed for eight days through to 500% per year.

Mangere East Family Service Centre chief executive Peter Sykes says he is worried people will not think about the consequences of defaulting on loans with such high interest rates.

Mr Skyes says many people are feeling the pinch and will not hesitate to text to get money.

However, Ferratum says it helps people who are unable to get a loan from their bank and people should read its terms and conditions before applying.