The main concern for many activists lobbying against the availability of Payday Loans on a nationwide scale is the targeting applied by Payday Loan Companies when they begin to pursue their marketing strategies. The overwhelming majority of lobbyists believe that Payday Lenders target un-educated borrowers, people who have little to no education, are un-employed or living on a paltry income, and have little to no disposable income. While in some instances this may be the case, it certainly does not apply across the board, and new research has shed new light of the types of borrowers most attracted to Payday Loans.
The average picture of the typical borrower is one who lives in a low-income household, and is under the age of thirty years. However, a recent study in Canada has highlighted that the average age of a borrowers is actually 40 years old. This particular study also makes the point that half of all borrowers have pursued further education and more than 70% are in full-time employment. This runs contrary to the popular myth that Payday Loan Companies target only unqualified borrowers struggling to meet their monthly repayments. From profiling a number of borrowers, the overwhelming majority were informed borrowers who made a deliberate decision to opt for a Payday Loan in advance of their next monthly paycheque.
It was also found that customers have a strong understanding of the terms of their agreement, and this understanding was broadly in line with the understanding they have of the various loan options and bank charges that apply to them also. It also found that the overall average income for the population of British Columbia was in line with that of Payday Loan borrowers in British Columbia. The main appeal to these borrowers is instant credit which they can use on any purchase of their choosing. This study also revealed how many Payday Loan borrower’s in British Columbia consciously opted for Payday Loans over banks and building societies, mainly due to the quick availability of the product on offer. This indicates that the interest rate charge on Payday Loans is a factor that many consumers are willing to overlook in light of the quick availability of consumer credit.
About the Author:
Mark Jang is a renowned author on Payday Lending.