Desperate Times Call for Desperate Measures (Provident Personal Credit)

Member Name: kitschkitty

Product:	Provident Personal Credit
Date:	12/10/08 (690 review reads)
Rating:

Advantages: Quick access to cash without credit checks

Disadvantages: Very high interest rates. Can take a long time to pay off.

Provident Personal Credit is part of Provident Financial PLC, which also operates Greenwood Personal Credit and Vanquis. Now if you're familiar with any of these companies, the alarm bells have probably already started ringing. Provident specializes in Home Collected Credit and has an estimated 60% of the HCC market.

According to their website, Provident Personal Credit "specialises in straightforward personal credit that puts you in control. We offer small personal cash loans that can be arranged in minutes and delivered to your door in days." So far, so good. But once you've assessed the interest rates, you'll see that Provident loans are a last resort for people who struggle to get credit elsewhere.

The example given on the homepage is for a £300 loan, repaid over 56 weeks at £9 a week. This means you'll end up paying back £504 which equates to a whopping 183.2% APR. Despite these phenomenal interest rates, I still found myself in a position with little choice but to take out a loan through Provident.

I won't go into great detail but my now ex was an alcoholic and a womanizer who decided to give up work and leave me to pay all the bills. I struggled by as best I could, ultimately getting behind on payments and ending up under a mountain of debt which I'm still struggling to pay now. When I found I didn't have enough to cover the monthly rent, I had little option but to turn to a company like Provident.

Provident does not require you to carry out credit checks in order to take out a loan. Instead, the agent who visits to sign you up will go through a simple income and expenditure with you to work out how much you can afford to pay each week, and therefore how much you can borrow. As long as you're honest, this should mean your weekly repayments are within your budget and affordable. It's also because of this added risk to Provident that you can expect to pay a lot more interest than you would at a high street bank. But let's face it, if you had an impeccable credit history, you wouldn't be borrowing from Provident in the first place.

I first signed up via Rpoints as although I might have been desperate enough to take out a loan with a ludicrous APR, I wasn't stupid enough to miss out on the opportunity to earn some cashback. After filling my details on the website, I had a knock on my door a couple of days later and met the lovely Elaine. She came in and together we sat at my dining room table and filled out the paperwork. Within a few minutes, I was handed a wad of cash and we arranged an evening each week when she would visit to collect payments.

In Provident's defence, although they target their loans at the poorest and most desperate people, the payment terms and interest is clearly explained and there are no hidden catches. Also, Elaine was very friendly and polite and I did enjoy our little chats each Friday evening. She always told me how I was her best customer as it would seem I was one of the few who actually paid her what I owed each week and she was very understanding if I sent her a text to say I was stuck in work and wouldn't be at home for that week's collection.

When I made my first payment, I was given a payment book which was signed off each week to show my balance gradually decreasing. I chose to pay £10 a week as the extra £1 was negligible but it gave me the psychological encouragement I needed to pay my loan in less than 56 weeks.

I eventually took out two loans from provident and have recently paid them both off. Although the interest rates were high, the money got me out of dire straits when I most needed some extra cash. It wasn't spent on anything frivolous, simply household bills and groceries. I have since found a fantastic way of saving money by moving into my own flat and finally getting rid of the ex. Now I've cleared my Provident loans and I'm slowly working through the debts I've amounted over the years. I actually miss seeing Elaine each week and my Provident loans did help to teach me the value of budgeting and only living off what I can afford.

I'm not saying everyone should rush out and get a Provident loan, but if you're struggling financially and have no other resort, then it's a far safer option than going to a loan shark and now home collection loans appear on your credit file, it may go a little way to helping repair your credit rating.

Summary: Make sure you look at your finances before getting yourself into more debt.