They may not be the loans cheapest to get but payday loans are proving very popular with females in the UK. Lenders promising instant cash and charging interest rates of up to 16,000 percent are attracting women in droves.
One UK female is expected to take a payday loan every 15 seconds during the next six months. In response, more payday lenders are popping up all over the country, offering easy ways for women to get cash.
Oakam is just one of the smart-looking payday lenders on High Street. As the rules for loans bank offered become more restrictive, UK women are visiting such establishments to secure expensive debt.
The payday lending industry in the UK has an estimated worth of £2 billion and is spending millions to attract female professionals who need cash quickly.
Marketing campaigns are designed with women in mind, such as the estimated £9 million worth of television advertising spend by Wonga in 2011, which included a spot during the finale of The X Factor TV show.
Female customers report that getting a payday loan is fast and easy, especially when applying online, Lenders like Quickquid supply cash within minutes of receiving an application.
Women use the money to cover rent, utility bills, or other expenses, hoping to repay the loan with their next paycheck. Those that are unable to often find themselves in more debt than they bargained for and on the receiving end of lender calls and emails.
Women are featured in advertising campaigns used by some of these lenders. Payday lending establishments are relocating from bad sections of town to High Street.
The lender Oakham even sponsored a beauty pageant, where it distributed information regarding its 300 percent Bonus Loan. The company claims it was not trying to target young females but attempting to increase visibility with the local community.
Some lender websites convey the message that a payday loan provides money to fit one’s lifestyle. This financing is promoted for purposes other than emergencies, such as buying new clothing.
Low requirements regarding income and bank account balances make these loans even more attractive. The financing seems reasonably priced over the short-term. The problems come into play when the loan cannot be repaid during the initial period.
Borrowing £100 from lender Peachy carries a 16,000 percent interest rate. After ten days, the amount due is £115, which is not so bad.
However, the late charges start at £10 after just one day and increase from there. Repaying this loan one month late will more than double the amount owed.
However, this does not seem to be deterring women in the UK. Ferratum reports that nearly two out of three British customers are women, most between age 18 and 35.
Industry trade group R3 anticipates that 500,000 females in the UK will take out a payday loan within the next six months. This figure is 25 percent higher than the estimated number of UK men.
Politicians like Labor MP Stella Creasy believe that payday lenders are targeting “financially vulnerable” young women through their snazzy websites and television advertising.