UK Payday Loans Target Not the Poor, but Women
Apply for a Loan
Secured with SHA-256 Encryption
UPDATED: Jan 10, 2012
Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.
Nicky Belgrove, a 27 year old interior designer, took out three payday loans that had a cumulative total of £550—roughly $850. After merely three months, those three payday loans snowballed into £3,000, or the equivalent of $4,639. In just three months, this borrower wound up owing nearly 450 percent on her loans.
But Belgrove was not poor, nor was she targeted due to her finances. British media source The Sun reports that payday lenders in the UK are targeting borrowers based on gender, not financial capability. In fact, an online payday loan lender called Ferratum said “the majority of people applying for loans are aged 18 to 35 and more than 60 percent are women.”
This increase in women borrowers may not be due to any differences in spending habits between the genders, but rather it may be due to different advertising and targeting strategies these money lenders are employing.
One UK based company called loansforwomen.org.uk contains the tag, “As we understand that being a woman you do not enjoy all the privileges enjoyed by a man, we make it lot easier and cheaper for you to get the loan.”
They advertise products such as “Start up Loans for Women,” “Business Loans for Women,” and the simple blanket term of “Women Loans.”
But it was a company such as this that targeted women with short-term, high-interest financing that caused Belgrove to take out a relatively small amount, and have that amount expound in something huge and unmanageable. As her bills continued to increase with each passing month, she simply did not make enough to pay them back in appropriate installments. Rather, she was forced to default.
“At breaking point and terrified of losing everything, I was forced to move back to my parents’ house to prevent myself becoming homeless,” she told The Sun. “I was forced to leave my interior design job in Hampshire as I needed to relocate to Birmingham where my family lived.”
While debt traps such as these are not unique to the UK, nor are they exclusive to women, the high APRs allowed by the British system do seem to make these experiences more common. In the United States, payday loans are restricted by individual state law. Most states have APR caps between 200 and 700 percent. However, in the UK some companies are reporting APRs in the 4000 percent range.
Despite those APRs, Loansforwomen.org.uk is adamant about making itself out to be a herald for women though.
“Truly, women loans are a great choice for today’s women who want to be independent in each and every field… Come to us and become empowered when it comes to self dependence,” says the website—which is registered not to a woman, nor a resident of the UK, but instead to a man named Amarjeet Singh in India.