Payday Loans get Celebrity Endorsement

It had to come and it’s none other than Kerry Katona who can be seen on a new TV advert endorsing a payday loans company that is targeting women in the UK – Pinklady.co.uk

 

payday loans

 

But, is this really a step too far for the industry and the celebrity?  Kerry Katona has been a bankrupt and would have difficulty getting any finance from the mainstream lenders who perform credit checks, require the applicant to be in full time employment and have a steady income.  However, she would be able to get a short term payday loan without any problem, which is the reason some commentators and campaigners against payday lending have spoken out against her appearance on the TV advert.  They state that she’s giving the sector a ‘voice’ that it doesn’t deserve.

 

Angry Bird

 

Kerry Katona has responded to the criticism on her blog with a few rants of her own and suggested that payday loans are very useful when people with a poor credit rating have got financial problems and goes on to say that she can’t see anything wrong with payday loans if they’re there for people who wouldn’t have access to any other funds.

 

The Marketing Men

 

With all the recent exposure given to short term payday loans by the media and the growth of the sector in recent years, the marketing men may have gone a step too far with trying to target the female borrower in the lower end of the loans market and to use a second or even third tier celebrity, it may lower the status of the payday loans sector in the eyes of potential borrowers.

 

 

On the other hand, it may actually expand the high cost loans market in the UK by attracting customers that had never considered these specialist products.  The media coverage and Katona’s TV advert may be exactly what was needed for this sector, as ‘any publicity is good publicity’!

 

What Next for Payday Lending?

 

It depends on how the public and the payday loan sector react to this type of promotion for a controversial financial product that has in recent months been demonised by both the mainstream media and a number of campaigners.  The latter have managed to convince the Government to include an amendment to the current Financial Services Bill getting its third reading in the House of Lords.  The main legislation being introduced in 2014 is to set a maximum level (a ‘cap’) for the interest rate (APR) payday lenders can charge.

 

 

The main outcome will be more competition in this very high risk lending sector, which will result in a major shake up in the number and quality of providers.  The best players will continue to operate within the new legislation, the medium ones will more than likely go out of business and the worst lenders (sometimes called ‘loan sharks’) will either get out of the market in the UK or move offshore and continue with their high interest rates (APRs) and sharp practices online.  Unfortunately there will always be borrowers in the UK that have no access to any other type of finance and will continue to suffer even with new legislation in place.

 

 

In the future the market could have a few brokers left that will offer the best service and only offer loans from the top ten payday lenders, which Gimmedosh.com has already positioned itself to take advantage of the changes to be introduced in 2014.

 

Payday Loans and Short Term Loans Provider.
176 Finchley Road
London
NW3 6BT
GB

 

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