The NUS have this week slammed the student pay day loan company, Smart Pig, accusing them of being “very dangerous” due to their exorbitant interest rates.

They took issue with a tweet from Smart Pig, which implied that the NUS would support the companies pay day loans.

The tweet in question, “NUS admits student budget is not enough. We agree! Check out our loans just for students (for short-term emergencies)” seems to suggest that students should resort to pay day loans because of tight budgets, despite the disclaimer that the loans are for emergencies.

Smart Pig advertise themselves as being an “ethical lender” and claim to be “responsible” in the way they lend money, despite the extortionately high levels on interest on their loans.

Yet the NUS have rejected this, claiming the company incentivises students to borrow.

Launched in 2011 by a Warwick graduate, it offers loans to students of up to £350 for 90 days at potential interest rates of a whopping 855% APR.  

This means that a loan of £150 for 60 days would eventually cost £216.95, if it was all paid back on time.

Tom Parks, one of Smart Pigs founders described the NUS as “militant”, insisting that many students already use pay day lenders, for which Smart Pig is a better alternative.  He also argues that Smart Pig refuse to lend more than a third of the value of your student loan.

Yet students have questioned the exact scenario in which Smart Pig’s services would be required. The company claim they provide for such “emergencies” as needing a book the library doesn’t stock, or if your car breaks down but whether these scenarios are worthy of a short term, high interest loan is highly dubious.

Charlotte Dixon, a second year MML student, said that she “couldn’t think of a situation where you would get a loan like this, and not just use your overdraft”.