Students warned about payday loans

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Students are being warned of the risks of taking out payday loans, as part of a campaign being led by the University of Northampton and the students’ union as part of National Student Money Week.

Activities and events have been staged at universities and colleges across the UK this week.

Money advisers are warning students to take advantage of the free help and support available to them if they find themselves short of funds before the end of term, instead of resorting to high-interest short-term credit.

Lynne Condell, chairman of the National Association of Student Money Advisers (NASMA), says: “There have been examples recently of payday loan companies targeting students with information about high interest money-lending options.

“For some students, both legal and sometimes illegal money lending can seem like an attractive route to additional funds. However, students taking this approach often realise too late that they are in serious financial trouble with no easy escape.”

The University of Northampton students’ union have taken the creative approach of labelling every pound coin to pass through their venues with warning labels, urging students to rethink taking out a pay day loan and consider the alternatives available to them.

Ben Wesson, vice-president engagement and participation at the University of Northampton students’ union, said: “The level of debt that some of our students find themselves in as a result of scrupulous lending companies is shocking. While campaigns such as ours have the ability to highlight the dangers of such loans, we really must take this opportunity to demand tighter regulation of the interest rates that can be charged and their promotion to students and other vulnerable groups in society.”

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