This Article Was Removed from Wonga Site On 19/01/2012
Wonga a payday loan firm has caused outrage by encouraging student to help fund their studies by taking out one of their very expensive loans.
This is a trick from Wonga and anyone who falls for it could find themselves in mountains of debt. It is far wiser to keep to more traditional borrowing.
The firms (APR) annual percentage rate is 4,214% typically, and a £300 loan paid back within 20 days would cost £65 in fees, if repayments are late the fees can be huge.
In comparison a student loan has an (APR) of 1.5% though this may not be a fair comparison as a payday loan is meant to only be short term not annually.
Wonga said on its website: "A student loan is fine to help you pay for your university and living costs, but what about those times when you're waiting on money to come in and you need to buy or pay for something unexpected now?
"There's a totally new way of borrowing money to see you through until your next cheque and it's called Wonga.
"A Wonga loan is essentially a short-term loan that can help you manage your cash flow, without having to extend an overdraft or credit card even further, or get a large student loan."
Are they not aware that many students do not have a pay cheque coming? And surely this must be encouraging students to get even deeper in debt..
Surely This Is Wrong
Wonga were asked to remove this from their page. They said they had put it there for SEO purposes rather than to target students.
They would do this so they would appear high in search engines when people on the web were looking for student loans.
With student loans you only need to repay them when you earn over £15, 000, 00 and you repay in proportion to your income. There are no debt collectors and it does not go on your credit file.
The interest rate on a student loan will never be higher than the rate of inflation". Compare that to the 4,214% Wonga charges.
Nobody should sell high priced credit to Students.
There is no financial education in schools and as a nation we are in enough financial difficulty without encouraging even more .
Wonga took this off their site 0n 18/01/2012 let’s hope no students were taken in by it.