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Birmingham Payday Loans

Birmingham Payday Loans

Birmingham payday loans are becoming increasingly popular. It’s no secret that the cost of living is really expensive. Parents can’t always afford to foot the bill these days and so it falls to the person to find the money. 

Payday loans are an attractive option for those who are struggling to pay for the cost of living while in further education. However, they don’t always help as much as students think they will. In fact, many end up in serious financial trouble after borrowing a payday loan. 

Now UK universities and colleges are being called on by The National Union of Students to ban advertising of payday loans on campus. 

University of East London first to ban loan ads

The University of East London has become the first university within the UK to ban loan ads on campus. It took the step after results were published by StepChange debt charity regarding the number of people under 25 who were falling into debt because of payday loans. 

Many of the university’s students have dependants to take care of, as well as the cost of getting through their education. This is what largely tempts them to borrow loans. 

It’s the same at any university. Students at the University of Birmingham have turned to Birmingham payday loans to help them through. It’s a nationwide problem but is it fair to ban students from gaining information on something that could help them?

How Birmingham payday loans can help 

When used correctly, payday loans can really help out in times of need. The key is teaching them the right and wrong ways to borrow. Schools don’t typically teach financial management. Therefore younger people are more susceptible to borrowing loans they cannot afford. They see advertisements and they often take them at face value. This is a potential disaster in terms of payday loans.

That is why it’s important for parents to step in and teach their children more about payday loans and when they should and shouldn’t be used. Universities and colleges could also teach classes on money management. This would go some way to preventing irresponsible borrowing. 

When used correctly payday loans can have the following advantages:

•They provide practically instant cash

•They are convenient

•They can be a great short term solution

The main thing to remember is that payday loans are a short term solution. They should never be taken out month after month. Students may only need help occasionally to afford the cost of living at university. Birmingham payday loans can be an ideal short term solution. 

There’s also the fact that many university students are based away from home. Therefore if they get into temporary financial trouble, their parents can’t always help them out quickly and easily. 

Payday loans can often provide you with the money you need within just a matter of hours. In fact there are some lenders who can have the money in your account within 15 minutes. This is because there’s no paperwork to do and they don’t always conduct credit checks either. So they can be really convenient in times of extreme worry.

Tougher regulations on way 

Payday lenders are going to feel increasing pressure over the next year thanks to the City Regulator. There are plenty of proposed changes set to occur in 2014 such as the need for lenders to have clear risk warnings on all advertisements 2. Lenders also won’t be able to pressure people into rolling over the debt. 

Students often end up in serious financial trouble when they start to roll over their payday loans. The high interest rates kick in once you start delaying the payment. While it may seem like a good idea to extend the loan for another month, don’t forget additional interest will be added. It’s amazing how quickly these interest payments can get out of hand. 

What the advertising ban means 

Banning Birmingham payday loans advertisements wont’ stop people borrowing completely, but it may lower it. The internet makes it incredibly easy for people to get all of the information they need. However, without advertising in actual universities, there will likely be a drop in the number of students who apply for loans.

When there are advertisements for a financial service everywhere you go, you soon start to take them more seriously. Universities and colleges are considered to be reliable, respected buildings. Therefore if they start advertising payday loans, students are more likely to have faith that they are a good option to take. They trust the university and if they are recommending loans, how bad can they really be? So the lack of advertising in campus will definitely lower the amount of trust in the payday loan market.  

In terms of overall borrowing however, it’s unlikely that the lack of advertising will make much difference. There are advertisements for payday loans everywhere. It’s not easy to escape them. 

2013 Payday loan statistics

It’s always useful to learn as much as you possibly can about Birmingham payday loans before you decide whether they are the right option for you or not. A few statistics regarding payday loans in the UK include:

•Five lenders have pulled out due to improvement notice

•Some people have taken out up to 80 payday loans

•There are 240 lenders currently in operation

•Out of 240 lenders, three of them take up more than half the market

The most shocking statistic on that list is the fact that some people have used payday loans up to 80 times. This is one thing students need to be taught. Payday loans should never be seen as a long term solution. 

Overall, there are many times when Birmingham payday loans can help students. However, there does need to be tougher regulations and more education regarding money management to encourage responsible borrowing. 

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APR Explained

Rates between 45.3% ARR to maximum 1575% APR

Representative 277.6% APR

Representative Example:

Amount of credit: £850 for 11 months at £146.30 per month.

Total repayment of £1,609.25. Interest: £759.25.

Interest rate: 150% pa (fixed). 277.6% APR Representative.

APR rates range from 45.3% APR to 1575% Max APR. Your APR rate will be based on your circumstances.

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