Payday Loan Use Statistics

Payday loans are extremely popular and according to the Pew Charitable Trusts research, they are applied by more than 5% of the entire U.S. population.

These small cash loans are short-term and have pretty high interest rates; they are also meant for the situations when a person needs cash urgently and can't wait for bank loan approvals and so on.

However, the recent statistics shows that the majority of borrowers applying to payday lenders does so not out of emergency but because they need to have their everyday expenses covered. Thus, they take such loans to cover rent and even mortgage repayments, in order to pay for utility and medical bills, for grocery stores, school supplies and what not - even for Christmas shopping.

One more reason why people choose to apply for payday loans instead of going to banks, or even friends and family - it is because banks take long time to provide approval and friends and family are not always there to give a hand. Besides, many people intentionally tend to avoid applying to friends and family for cash in order not to have any specific problems afterwards.

The Pew report came very interesting and surprising in many ways. The fact that high interest rates do not prevent people from applying for payday loans and in the mass scale - surely, mostly in the states where the latter are allowed. They are taken for much more trivial reasons than emergency in the first place, for covering constant cash shortfalls instead of for dealings with urgent temporary problems.

Surely, the aforementioned 5% are not spread evenly throughout the country. The majority of loans are taken in the states with permissive practices where payday loans are not strictly regulated. In those states where payday lending is not really authorized, the application statistics is not even close to that level; however, there are borrowers who still chooses to take a payday loan on any terms they are offered because of the toughness of their financial situation.

The Pew report came very interesting and surprising in many ways. The fact that high interest rates do not prevent people from applying for payday loans and in the mass scale - surely, mostly in the states where the latter are allowed. They are taken for much more trivial reasons than emergency in the first place, for covering constant cash shortfalls instead of for dealings with urgent temporary problems.

Surely, the aforementioned 5% are not spread evenly throughout the country. The majority of loans are taken in the states with permissive practices where payday loans are not strictly regulated. In those states where payday lending is not really authorized, the application statistics is not even close to that level; however, there are borrowers who still chooses to take a payday loan on any terms they are offered because of the toughness of their financial situation.

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