17 May 2016
Google bans pay day loan ads
Alongside guns and drugs, payday loan companies are now on Google’s ‘harmful products’ blacklist, meaning you’ll no longer see their ads in your searches!
Credit: Helen Cobain – Flickr
We’ve all seen these ads trying to lure you into taking out a payday loan online.
They promise a really easy short-term solution to your money woes –but they’re actually pretty dangerous with huge interest rates that are often impossible to pay back (without taking out another loan… you see where this is going!).
In 2015, the government clamped down on payday loans companies, enforcing certain regulations in an attempt to protect users from dwindling into extreme debt.
Although the industry was pretty hard hit by the regulations, unfortunately people do still continue to use payday loans as an option.
Google are on a quest to be the good guys here, claiming they’ve recognised the sticky situation that these companies get people into, and that they believe the world is better off without them.
The director of Google’s product policy, David Graff, has said:
Financial services is an area we look at very closely because we want to protect our users from deceptive or harmful financial products.
In order to ‘protect’ their users, Google have now banned any payday loans companies who charge more than 36% APR (currently only imposed officially in the US, but should happen in the UK soon too) or those who expect loan repayment within less than 60 days from advertising within their searches.
However, it is important to note that, if you search for a payday loan lender – it will still appear. This is because Google are banning companies from advertising on their site, not banning them from appearing in search results.
Are payday loans that bad?
Credit: Jonathan Rolande – House Buy Fast
Yup, payday loans really are that bad. Scarily, almost anyone can get accepted for a payday loan regardless of their credit rating and whether they’ve already gotten themselves into heaps of debt.
You’re made to think that taking a payday loan out is basically just like borrowing some cash from your parents until payday, but really that would only be the case if mum and dad tapped you £50 on the condition you bought them a second-hand car when payday came along! Still sound like a good option?
For any student currently living off beans thanks to the meagre maintenance loan offered by the government that doesn’t come close to covering living costs, payday loans can be really tempting.
However, the annual percentage rates (APR) for these loans can be through the roof, so please don’t be tempted! The most well-known payday loan company, Wonga, have a representative rate of 1,509% APR (for a bit of comparison here, a loan from Barclays is only 4.9% APR).
We understand that these lenders can be tempting – but please, don’t be sucked in! You may need £100 this month, but can you afford to repay £200 next month?
We’ve put together a guide to explain all about payday loans and alternative options.
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