Payday loan company Wonga has been branded as “incredibly irresponsible” for targeting students in pages on its website.
The National Union of Students (NUS) said it was wrong for the company to push the short-term loans – with a typical APR of 4,214% – as part of a student’s everyday financial planning.
But the company said applications would undergo rigorous checks.
An official study said that these loans could prove useful for some people.
Typically someone will borrow a few hundred pounds from a payday loan firm for a short time, then pay it back when they receive their next slice of income.
The industry is regulated, but there has been some criticism of the cost of these loans.
The NUS has criticised marketing on the Wonga website which promotes the loans for occasional emergencies or unexpected events. The website suggests that large value official student loans can encourage people to live beyond their means.
Wonga tells people it’s great way to be able to afford holidays and things they want:
In the last few weeks a record number of UK citizens have resorted to getting payday loans as they have maxed out their credit cards, ironically following on from UK government suggestions people should not be so pessimistic but rather boost the economy by spending.