Payday loan services are used by a variety of Americans from different backgrounds. It’s important to be aware that some lenders tend to focus on individuals who may be facing more challenges in their lives. These groups may include:

• People with low income
• Young adults aged 18-24
• Individuals who frequently borrow money

Important Findings from a Nation-wide Survey

Did you know that the Pew Safe Small-Dollar Loans Research Project provides valuable insight into the demographics of people using payday loans in the United States? This survey highlights that individuals without a college degree, renters, African Americans, those earning less than $40,000 per year, as well as divorced individuals are more likely to have a payday loan.

Assisting Low-income Individuals

Did you know that the average income of those who take out payday loans is around $30,000 per year?

The Consumer Financial Protection Bureau has also found that payday loans are more commonly used by renters rather than homeowners. In fact, 58% of payday loan users are renters, and approximately 10% of all renters rely on payday loans.

It’s important to note that payday lenders specifically target low-income households as their main customer base.

Unfortunately, individuals in low-income households often face difficulties obtaining low-interest loans due to their inability to provide collateral. Consequently, their options are limited to high-interest-rate loans like payday loans.

Payday lenders are aware of this situation and intentionally focus on attracting young people and those who are struggling financially.

Age Group: 18-24 years old

Payday loans are used by individuals from all generations, but it is important to note that a growing number of young people are turning to payday loans. Specifically, in the United States, payday loans are increasingly utilized by Millennials and Gen-Xers to cover unexpected expenses. Interestingly, the majority of these borrowers fall within the age range of 18 to 24 years old.

It is unfortunate that today‘s young Americans are facing significant economic uncertainty. The wages they earn often fall short of covering essential expenses, with student loans being one of the leading causes of financial stress.

Findings from a CNBC survey highlight that nearly 40 percent of individuals aged 18 to 21 have contemplated using a payday loan. This number increases to 51 percent among Millennials. It is essential to recognize that while payday loans may seem like a temporary solution to bridge the financial gap until the next paycheck, they do not address the underlying debt issues and often result in a cycle of borrowing and indebtedness.

To gain a deeper understanding of the debt crisis faced by young people in America, we invite you to explore our comprehensive guide titled “Why Are Young People Facing A Debt Crisis?”

Helpful Information for Borrowers

Did you know that a large number of Americans who use payday loans are frequent borrowers? It’s true! On average, borrowers find themselves in debt for about five months every year.

Let’s take a closer look at the statistics: About 1 in every 4 payday loans gets rolled over more than nine times. This means that some borrowers end up stuck in a cycle of debt with hefty fees.

It’s important to understand that reborrowing can have a negative impact on your financial situation. High fees and unmanageable debt can make matters worse and even affect your credit record if left unpaid. To learn more about the dangers of payday loans, we recommend checking out our comprehensive guide.