Undergreed: Payday lenders offer cash at 1300% interest rates to desperate students

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Dozens of online brokers advertise loans worth between £ 50 and £ 3,000 and some offer to pay off in just 15 minutes

Former student Kerri, 25, borrowed £ 600 at super high rates from payday loan companies to cover food and bills

Payday lenders are offering desperate students cash at interest rates of 1,300%, a Sunday Mirror investigation found.

Dozens of online brokers advertise loans worth between £ 50 and £ 3,000 and some offer to pay off in just 15 minutes.

They cater to cash-strapped students who struggle to pay their rent and other living expenses, but end up taking on more debt.

A broker targeting UK students is run by an American businessman who has been fined £ 250,000 for breaking the rules.

Davit Gasparyan, 40, based in California, heads Bournemouth digital marketing company T Dot UK, parent company of Simple Payday.

Simple Payday promises ‘bridge loans’ of up to £ 1,000 in less than an hour.

But rates start at 1,192 percent.







California-based Davit Gasparyan heads Simple Payday’s parent company





Last September, the US Consumer Financial Protection Bureau fined one of Mr Gasparyan’s other businesses £ 71,000 for touting payday loans that kept borrowers in the dark about risks and costs.

Another of his businesses was fined £ 179,000 in 2016 for reselling loan applications containing sensitive personal information.

A separate broker, Loans for Students, based in Barnsley, South Yorks, advertises up to £ 3,000 at an annual rate of 1,299%.

London-based New Horizons offers undergraduates between £ 50 and £ 2,500 at an annual rate of 278%.








Our findings come the same week Theresa May announced a review of the ‘broken’ student funding system
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Picture:

Laurent Sawyer)






Stockport-based Payday Pixie is offering to arrange loans up to £ 2,000 “within 15 minutes”. A fifth lender, Viva Loans, says it only takes two minutes to complete an application and 15 minutes to transfer funds.

Our findings come the same week that Theresa May announced a review of the “broken” student funding system.

The Prime Minister is facing calls to cut the interest rate on tuition fees loans, fearing universities will regularly charge the maximum of £ 9,250 per year.

Izzy Lenga, National Union of Students, said: “The current student maintenance program is neither fair nor fit for purpose. It plunges thousands of people into a spiral of poverty while shackling students with ever-growing debt.

“More and more people are turning to high cost lenders. “

The Save the Student money advice site says nearly half are struggling to pay an average rent of £ 556 per month, leaving just £ 36 in government loans to cover other costs.

Labor shadowy education secretary Angela Rayner said: “This survey shows that since the Conservatives cut subsidies, the most vulnerable have been targeted by predatory lenders. The next Labor government would immediately restore maintenance subsidies for those who need them most and cut tuition fees. “

Mr. Gasparyan did not respond to requests for comment. Brokers Viva Loans, Loans for Students, New Horizons and Payday Pixie all did not respond to requests for comment.

I’ve seen friends go into more debt

By Joana Ramiro

A cash-strapped graduate borrowed £ 600 at very high rates from payday loan companies to cover food and bills.

Former student Kerri, 25, said it was despite a full maintenance loan and a diet of rice, baked beans and budget ready meals.

The Brunel University politician said: “I would literally log on and in half an hour the money would be in my account.

“The £ 1 Icelandic meals were mostly what I ate towards the end of each term before the next student loan payment. Jobs for students that are flexible around study are hard to find.

She said she always paid off her loans within a month, but others had more problems.

Kerri, now a researcher, added: “Friends would get one loan and get another to pay off the first one. They were always losing money in interest.

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