Money Loan Facts and Statistics
1. According to https://www.loantruth.com/facts/payday-loan-statistics/, 12 million people in this country take advantage of money loans each year. People ages 25-49 are most likely to receive money loans. Storefront money loans are seemingly on every street corner in the city. Money loans are also prevalent online. You can do a quick search and find countless amounts of companies that offer these loans. They are easy to get, as all you need is a checking account and a source of income. Therefore, it is easy for consumers to turn to these money loans to get them out of a financial bind. People who live in the south and those living in urban cities are more likely to take out money loans.
2. The average income for a person with a money loan is $30,000 each year. (https://consumerist.com/2013/04/26/the-average-payday-loan-borrower-spends-more-than-half-the-year-in-debt-to-lender/) People who are applying for these loans do not fall into the higher income range. In fact, only 4% of money loans go to people who earn more than $60,000 annually. Many people who receive money loans make less than $20,000. Many college students with only part-time jobs are getting money loans. They have no credit history and no collateral, and they feel that they need money to help them get through. The people who obtain money loans sometimes have bad credit and cannot get other loans who have a lower APR.
3. https://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2016/01/payday-loan-facts-and-the-cfpbs-impact says that the average person who borrows a money loan is in debt for 5 months of the year. Just do borrow a few hundred dollars will result in enormous fees. There are about 23,000 money loan lenders across the country. This is not counting the online lenders that are available. The average amount money loan lenders will loan a borrower is between $500 and $1,000. After a person repays the loan, lenders will try to entice him to get another loan. They cycle is never ending; therefore, people are really prone to getting into a huge amount of never ending debt.
4. A study found that 80% of money loans are rolled over or re-borrowed. (https://www.opploans.com/blog/5-alarming-stats-payday-loans/) Normally, these loans are due within two weeks; however, lenders normally will give borrowers the option to extend their loan. To get these loans, you do not even need goo credit. In fact, no credit check is conducted. Because consumers are not able to pay the loan on-time, they keep extending the loan, which results in high fees. This can also get the borrower in more debt than they already are. It can be difficult to escape from this dangerous cycle of debt. People start out trying to repay the loan in 2 weeks, and it quickly becomes six months.
5. Only 14% of borrowers of money loans can afford to repay their loan. On average, repaying a money loan will take up 36% of a person’s gross paycheck. Moreover, research shows that borrowers cannot afford more than 5% of their paycheck just to cover monthly obligations. These loans carry a very high APR, and most lenders charge the maximum rate as allowed by law. Some states have limits on rates, and some states do not. Borrowers who take out money loans are so desperate for money that they cannot see or do not care that they cannot afford these pricey loans. (https://20somethingfinance.com/payday-loans-ban/)
6. The most common uses of money loans includes living expenses, such as gas and groceries. 58% of those who get money loans just have trouble paying their expenses. These money loans are meant to cover emergency expenses, such as medical bills; however, most people need the money just to pay for things they need. These are the most common types of unsecured lending available. People cannot pay their rent, they do not have gas money, or they cannot by the groceries they need just to get by. (https://lendedu.com/blog/payday-loan-statistics/)