Everybody is familiar with unexpected expenses. Life is filled with surprises, and many are of the financial kind. Whether you need money for emergency medical expenses, to cover the gap during a job change, or you find yourself hit with essential home repair bills, weve all been there. You just need that little bit of extra money to carry you through to the next paycheck.
There are a lot of misconceptions about payday loans. Some people view payday loan companies as the lender of last resort, but there are many reasons people from all walks of life make payday loans their first choice when they’re in need of quick cash. Lets take a look at some little known facts about the benefits of payday loans and who is taking advantage of this short-term borrowing option.
Probably the most common assumption about payday loans is that they’re used exclusively by people from low-income households. On the contrary, most payday loan customers are employed full time (over 75%) and almost 50% are college educated, showing a household income that’s average or better when compared to other local households. Young, poor, and uneducated are simply the wrong adjectives for these consumers, who instead tend to be college grads, an average age of 38, and show an income of $25,000 to $50,000 per household.
This blows apart the stereotype of the payday loan customer who doesn’t understand the terms of the loan as well as the myth that people who use payday loans are victims of the payday loan industry. Instead, most customers are very familiar with the terms and fees and understand exactly what theyre agreeing to. Far from being taken advantage of, they are generally educated consumers reaping the benefits of this short-term credit option to help them bridge a temporary financial gap or meet an emergency need.
This leads to the next point: the myth that payday loan customers are irresponsible borrowers when it comes to repayment. The fact is that four out of five customers repay all their loans on time. They’re aware of the fees they can expect to pay, and also of the negative credit consequences for failing to repay. In addition, they don’t take out large amounts; the average payday loan is only about $300.
This leads to the next point: the myth that payday loan customers are irresponsible borrowers when it comes to repayment. The fact is that four out of five customers repay all their loans on time. They’re aware of the fees they can expect to pay, and also of the negative credit consequences for failing to repay. In addition, they don’t take out large amounts; the average payday loan is only about $300.
Dispelling these common payday loan myths creates a more accurate profile of the average payday loan customer, but with this information in mind, you might be wondering why they choose payday loans over other options. Well, that answer is simple. Payday loans are CONVENIENT, and that’s clear to the educated borrower.
Payday loan companies typically have hours that extend well beyond the 9-5 hours of banks, locations that are numerous and easily accessible, and their customers can borrow the small amounts they needed and get the cash quickly. Traditional lenders cannot match the convenience or speed of this service, and may not even offer loans in smaller amounts, even though they charge lower interest rates. There’s also no need to fill out extensive paperwork for a payday loan; all that’s typically required is proof of employment and a steady income.
You might not have considered a payday loan as an option for you when it comes to short-term borrowing, but its definitely worth a closer look. Keep this solution in mind, because a payday loan might be just the answer to your next unexpected financial need.
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