Who is the Average Payday Loan Borrower?
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Payday lenders loan out thousands of dollars every week to people who are in dire need of money. The Community Financial Service Association of America says that the payday loan cash advance industry extends about $25 billion in loans per year.
Payday lending is often regarded as something predatory and it is of the common belief that payday customers are being used as fodder by the money hungry payday lenders. However, the various researches undertaken throughout the years contradict the view that payday loans are predatory and the borrower is always being preyed upon. In fact, recent studies have shown borrowers preferring payday loans to other loan alternatives.
The huge Annual Percentage Rate (APR), in the range of 391% and higher often makes it intimidating to the people who opt for these loans. But studies conducted throughout the States show that people from all walks of life consider payday loan cash advance as an affordable option to meet their financial needs.
The US Census report of 2000 show that 22% of the surveyed payday loan borrowers hold a bachelor's degree from college. More than two-thirds of the people surveyed reported an annual income of a minimum $25,555 and they also have a savings account. Also, 51% of the surveyed population had a retirement savings plan.
Viewing the industry statement, it seems that the payday cash advance customer has more than the average level of education than the general US population.
A typical payday loan customer is between 25 to 40 years of age and has an annual income between $25,000 and $50,000. Also, people from all walks of life, including teachers, civil servants and corporate employees consider payday loan as an efficient solution to the short term financial emergencies.
You have seen them on the corner and in the poorer parts of town with names like "Quick Cash", "Quick Loan", "Payday Loans", "Car Title Loans". They are starting to sprout up all over the country and will soon rival Starbucks for sheer number of locations.They are the new trend in predatory lend. . .