This article provides information regarding payday loans.
Payday loans are short-term, small loans which charge very high interest rates. In theory they are supposed to be used as cash advances on wages, which people then repay once they have been paid, but the students are taking them out and repaying them when their student loan comes in. These types of loans are readily available online and on the high street.
You are normally given a month to repay the loan and in most cases the loan company will automatically debit your bank account for the payment on an agreed date. If you have no money in your account they will continually attempt to take it, which may cause you to be charged by your bank.
Unfortunately, we have seen more and more students resort to payday loans as these type of lenders target students with information on their products. This can seem like an attractive short-term fix and an easy source of extra cash but we would recommend you avoid this type of borrowing and look at other options that may be more appropriate.
We have seen first hand how students can get themselves into further difficulty by taking out payday loans and would always encourage you to come and speak to us first. The Student Finance Centre hosts experienced non-judgemental staff that will be able to advise you, and we have hardship funds that you can apply for if you are struggling.