Payday loan insights outline the targeted demographics of these payday loan companies. Many of these companies know that their customers can’t afford to pay them back. This industry has become almost predatory… it’s a very good thing companies like us work to consolidate this debt. These are telling numbers and a direct reflection on the differences between the rich and or comfortable, and lower-income people. Why Do people find Payday Loans to make their financial situation worse? Payday loans are extremely short-term loans. They have to be paid back in full immediately or the interest on them carry anywhere from 200-700% or more APR when the fees are annualized. Why do so many people suffer… because Payday Loans are not heavily regulated and many are left in the wild west in regards to their finances. Let’s take a look at the target demographics of these payday loan companies, these statistics are courtesy of finder.com
Who takes out payday loans?
You might very well be surprised or you might not, but the reasons people take out payday loans are the scariest part of this article. Read on!
a. Payday loans are most commonly taken out by people ages 25 to 49. Senior citizens more commonly use their credit cards or take out personal loans.
b. People who haven’t completed a four-year college education are twice as likely to take out payday loans then college graduates.
c. People who are separated or divorced are twice as likely to take out payday loans than people who are married or single.
d. People with kids are more likely to take out payday loans than people without.
e. Renters are twice as likely to go the payday loan route as people who own homes.
f. African Americans are twice as likely to take out payday loans as people of other races or ethnicities.
Low-income households, People with household incomes less than $40,000 a year are three times more likely to take out these high-interest loans than people with higher incomes. People in households making between 15 and $25,000 a year are the most likely to take out a payday loan.
These are telling numbers and a direct reflection on the differences between the rich and or comfortable, and lower-income people. This country has no middle class anymore. Here’s the scary part of this story. 69% of all people who take out payday loans aren’t worried about emergencies, broken automobiles, busted washing machines, or an air conditioner that doesn’t work. 69% of the 12 million people who take out payday loans every year use the money for simple daily expenses like food, electricity, and water bills.
Rent payments and credit card payments. Credit card payments are a terrible reason to take out payday loans. Just stealing from Peter to pay Paul at usurious interest rates. There are no answers. Our society today doesn’t seem geared to help create the answers but instead to keep perpetuating the problem by not clamping down on these payday loan companies. At this point, the best solution is payday loan debt consolidation. Reduce your interest rates down to zero and pay these damn things off quickly.
If you’ve found yourself or a friend stuck in this vicious debt cycle please have them contact us immediately!