BEIJING — The Ministry of Education on June 23 told students to exercise caution when applying for online loans, warning of fraud and usury.
The ministry’s call came as a fast growing but not properly regulated market of online loans specifically targets students. In some cases, lenders offer false credit data and low thresholds to lure applicants into borrowing more than they can afford, and ultimately into usury traps.
Student debtors’ information has a high risk of being leaked to third parties and some lenders resort to violence to deal with defaulters.
“Students should be fully aware of the risks of dubious online loans and have a sense of financial security,” the ministry said.