January 12, 2012
Students are being targeted by a ‘legal loan shark’ offering cash at an astonishing 4,214 per cent annual rate of interest.
Wonga.com is marketing its exorbitant scheme as an alternative to Government-backed student loans – which attract interest rates of just 1.5 per cent.
Charities warn the payday loan company is ‘moving in for the kill’ following the Coalition’s shake-up of higher education which will see fees rise to as high as £9,000 a year in the autumn. Universities have already revealed cuts totaling £14million to bursary schemes for the poorest, which critics fear may lead to even more students being ‘preyed’ on by such companies.
The idea behind Wonga.com loans is that students borrow relatively small sums, up to a maximum of £1,000, over a short period of time.