Payday Lenders Accused Of Targeting Students Online

Due to rising tuition costs for higher education, and the fear of not being able to afford school costs more and more payday loan companies are trying to gain loan customers by “targeting” college students.

“Student loans are generally much cheaper than a personal loan, but you could end up borrowing way more than you need. Your debt is growing to the point that will take years to repay, if you use a cash advance loan the interest is much higher, but you are only borrowing that money for a month and then you can repay it on a date that suits you”. This is essentially the language of the payday lenders marketing campaign reaching out to the college market.

While parents, educators and consumers are considering this a moral disgrace, the cash advance centers are defending themselves. They are fervently stating their position saying that they make decisions regarding the data that has been provided not an individual’s educational status. They have made it clear that if a student were to take out a payday cash advance loan, then they would need a regular income and that students in general make up a very small percentage of their clientele.

The allure of an alternative to a government based loan that charges upwards of 600% interest, fades pretty fast once the facts are on the table. The student loans offered by the government probably have the best interest rates as well as the most convenient repayment terms available today.

However with the clever marketing, bright and fancy colors, an easy to use interface it can make it very easy to persuade people to do things that are against their better judgment. Some of the common problems in the Y generation are that they were born and raised online so to speak. They are much more likely to trust the information that they see online and when the increasing tuition starts to make them financially uncomfortable it’s much easier to just hit the apply button.

A marketing plan suggesting that the students could use their short term loan for “emergencies or unexpected events” has been very effective in the payday loan cash advance marketing strategy by appealing to the day in day out situations that people generally worry about on a daily basis.

This may be another attempt at “predatory marketing” by the payday lenders to take advantage of younger people that don’t have a lot of financial experience, and who probably don’t yet understand the long term repercussions of engaging in these types of loans. The very easy to use online submission process makes it tempting to borrow a quick buck.

While we are now accustomed to easily exchanging information and applying for credit cards and loans online, this familiarity has made almost everything believable and safe. And it basically just ends up leading you to make a mistake by not reading the fine print and knowing exactly what you’re getting yourself into.

We remind you that if you are searching for a new payday loan, then please explore all of your financial alternatives as loan rates and fees for short term cash advance and payday loans are quite expensive, and should only become a loan of last resort.