Payday loan investment firms to be targeted

The instant cash loan industry may need to weather yet another broadside as new plans were announced to target investment firms bankrolling providers of instant cash loans in an attempt to curb interest rates viewed as ‘sky-high,’ experts say.

Stella Creasy, Labour MP, recently remarked that she has plans to place pressure upon venture capitalists in order to cease providing finance to controversial providers of short term loans, as some of these companies have been accused of preying upon low income earners and other classes of borrowers with high debt, such as the military and students.  Ms Creasy said that these cash loans carry APR interest rates as high as 4,000 per cent, though lenders say that the figure is misleading due to the short term nature of these loans, as they usually last only about a month and not a full year or more like traditional lending.

However, Ms Creasy insisted that the industry urgently needs to be reformed.  The MP also announced plans to investigate the major pension funds in the UK in order to determine if there are any links with firms providing capital to payday lenders that provide loans in an irresponsible manner to the nation’s financially troubled.

Many major payday lenders have been slammed in the press recently for appearing to entice students to take out loans.  Many of the online adverts of these companies encouraged students to avail themselves of an instant cash loan in order to finance a night out or using the cash to go on holiday, a move that has been swiftly condemned by honest payday lenders as irresponsible and predatory.

© 2024 All rights reserved. Reproduction in whole or in part without permission is prohibited. See our copyright rules.

What do you think?

Please note that email addresses are not visible on approved comments.