Students are using payday loans to cover the cost of living and tuition fees which is leading them into debt, according to a new survey.
Student lender Future Finance surveyed 1,000 students on their financial habits and found 25% owed an average of £342 to payday loans.
More worrying was 54.5% admitted to incurring late charges due to missed payments and due to high interest rates these are often expensive.
Our experience at Debt Support Trust shows once someone incurs their first last charge they are far more likely to incur another. This is generally the point where the loan becomes a spiralling debt problem which is hard to recover from.
Payday loans were just one source of credit for students, with 24% saying they were gambling and 13% taking part in paid clinical trials. 58% were getting financial support from their mum and dad.
Although 64% of the students said they worked part-time, a sixth said they also felt it was affecting their eduction.
Help for Students with Payday Loans
While the cost of living continues to rise the temptation for students to take out payday loans will likely increase but help is available.
- Budget: Before taking a payday loan students could find extra money by creating a budget. We know it sounds simple but just writing down a list of income and expenditure can help find methods to save money.
- Low Interest Credit: If a someone does require additional credit, maybe for a short period, searching for a low interest rate credit facility could make it easier to repay and reduce the risk of it becoming a debt.
- Debt Solution: When a payday loan becomes difficult to repay students may need to consider a debt solution to help deal with it.
Get Debt Advice
If you require further help or advice on dealing with a payday loan debt you can contact Debt Support Trust on 0800 085 0226.
Whether the loan has become unmanageable or you're just considering taking out a loan, we can help advise how best to deal with your financial problem.