The FCA has caught dishonest payday lenders targeting students with fast student payday loans with high interest. Find out more from Quick Loans Express, a trusted and responsible direct lender about how much the FCA fined dishonest payday loan lenders and why these lenders target vulnerable students.
In this day and age, it is hard being a student. Before even achieving their degree, securing a job and paying for everyday living expenses, students are heavily in debt that may hang over them for 30 years to come. We could point a finger at student loans and accuse the scheme of taking the joy out of student lives and charging high-interest rates that students can’t refuse however, sometimes even a student loan isn’t enough. Many students are turning to student payday loans to cover their basic bills and food. Unfortunately, dishonest payday loan lenders and loan sharks prey on students vulnrability and are breaking FCA regulations set in place to protect students and other borrowers by offering them student payday loans without following the guidelines.
Student Payday Loans
You may have heard sadly about a 21-year-old university student by the name of Naseeb Chuhan who was found hanged after his debts spiralled out of control. He felt suffocated by the student payday loans he owned to dishonest lenders that charged 1200% interest. His father criticised that initially, instant payday cash appear tempting, especially when you are strapped for cash. However, if you are continuously borrowing from payday lenders, it becomes a huge problem.
Unfortunately, he is not the first student to suffer from debt problems. Many students rely on simple fast loans or bridging loans when their expenditure exceeds their student loan income. However, often these dishonest payday lenders who lend to a student payday loans are dangerous and are breaking the rules. Most mainststream payday loan lenders will not lend to students who do not have a steady and high enough income.
Student Payday Loan Lenders Caught!
Simple Payday – a broker, has been fined £250,000 for breaking FCA regulations. They promised ‘bridging loans’ to students of up to £1000 in less than 1 hour. Their rates, however, started at 1,192%. Davit Gasparyan runs the parent company of simple loans T Dot UK, and it is not the first time he has been caught out. In September, the US Consumer Financial Protection Bureau fined another of Mr Gasparyan’s payday loan businesses £71,000 for keeping borrowers in the dark about the costs and risks of taking out a payday loan. He has been fined a further £179,000 for another of his companies for reselling loan information of sensitive private information.
Mr Gasparyan is the not the only shady businessman in the payday loan industry. Before applying for any payday loan, make sure the lender is FCA regulated, and the interest is not too high! If you cannot afford a payday loan, you may need to consider other safe ways to borrow money. If you are feeling totally in despair over your finances, you may want to think seriously about contacting debt specialists who can advise you personally on debt, budgeting and saving money.
Why do Some Lenders Target Students?
Unlike mainstream payday loan lenders who do not prey on students, dishonest payday loan lenders will. They will lend to students even if they can not afford to make the repayments. Most students cannot afford payday loans because either they don’t earn money, or they earn very little. Payday loan regulations should not permit student debt to escalate. Credit scores play a huge role in deciding whether to fund a student or not; as does their affordability of a loan. Students using payday loans should be rare. Unfortunately, it is not. 25-year-old Kerri acknowledges she has student friends who survive on a payday loan to payday loan and they are forever losing money on the interest.
Students, universities and debt charities are raising the issue of the speed applying and receiving a payday loan takes. As one Brunel University politics graduate put it, “I would log in and have the money available in less than half an hour.”
Unsafe Instant Loans Available
Why are So Many Students in Debt?
Students receive a maximum of £9,000 student loans towards tuition and a maximum loan of £5,555 (or £7,751 – London Students) for living costs. Based on a three-year study, a student can accumulate £43,665 debt on student’s loans alone. If students were taking out payday loans as well, they are likely to fall into a profound and disturbing debt.
There are minimal opportunities for earning money in university. Although students try and find part-time jobs to help pay for their living costs, it isn’t easy especially as these have to fit in with their student courses too.
Students, however, are often criticised for spending too much and living far beyond their means. They may be tempted to live on a higher standard because student loans are given to anyone who applies, and therefore cash is readily available for them. However, the problems really start when their student loan runs out – it’s then when students either stop spending or turn to payday loans.
Despite student loan rates soaring, most students will use them to pay for university. However as this is not enough for some, they may look for payday loans to help them cover their expenses like food and bills. Dishonest payday loan lenders are targeting students and charging them abhorrent levels of interest. They are being exposed and prosecuted by the regulatory boards for lending irresponsibly to students and other financially vulnerable people.