Payday loan survey results in US has thrown a surprising data which strongly favors payday loan and its lenders. Read to know the details.
CFSA or the Community Financial Services Association of America asked Harris Interactive to carry out a detailed survey to find out whether consumers were happy with payday loans. It was important for the CFSA to find this out, as lawmakers and many experts have been complaining about these cash advances.
So what did Harris Interactive find out? Is it time to impose stricter regulations on the payday loan industry, or even ban their operations, or should the lawmakers be actually promoting them? What do the consumers, the people who actually matter, think?
The truth might surprise you!
Here are some of the findings of the Harris Interactive survey…
Summary of Detailed Findings of the Payday Loan Survey
The surveyors discovered that a vast majority of the borrowers are recognizing the benefits of payday lending. They appreciate that these short-term loans can bridge their financial gaps.
a) Give them a safety net when they face an unexpected financial issue (95%).
b) It is a smart decision to take a loan when there is an emergency cash shortfall (92%).
c) It is worth the cost, as they can avoid all those late charges (89%).
d) These loans help them bridge their financial gaps (87%).
a) 28% for avoiding a late fee.
b) 23% to avoid overdrawing their bank accounts or bouncing a check.
c) 19% to help a relative or friend who required cash.
d) 10% cited other reasons.
a) 4% said they will take the loan to avoid not paying a bill, or to avoid the penalty or late fee.
b) 3% took the money to prevent overdrawing their bank accounts and for not paying the overdraft fee.
c) 24% or one-quarter were not sure of the option, but would use the payday money for both of them.
a) Cutting their spending (67%),
b) Borrowing from friends or family (60%).
a) Bank account overdraws with the overdraft fee – 43%
b) Credit card – 41%
c) Pawning a personal item – 27%
d) Bouncing a check with the fee – 25%
e) Cash advance on the credit card – 17%
f) Title loan or installment – 15%
g) Something else – 6%
Interestingly, most of these borrowers had the option of going for at least one of these above mentioned financial resources when they took a payday loan. In fact, 92% of the respondents said that the payday loan wasn’t their only option, but they still decided to take it as this seemed the wiser alternative.
Among the borrowers who had one other resource available at least when they decided to take a payday loan,
a) 71% said that it was faster and/or simpler.
b) 70% said that these loans were easier to understand.
68% said they didn’t want to borrow money from friends or family.
a) 65% said they had a previous good experience dealing with a payday lending company.
b) 64% said they did not want to overdraw their bank account and pay for the overdraft fee.
Why People Trust Payday Loans According to the Harris Interactive Survey
a) Almost all respondents (98%) said that they are at least somewhat satisfied with these loans.
b) 65% or two-thirds said that they were completely satisfied with their payday lending experience.
Reasons Borrowers Are Satisfied With Payday Loans
Positive Borrower Experience
97% people said that their overall experience with the process of payday lending was as expected. 61% said that it was actually better than they expected. Only about 3% individuals said that it was worse than expected.
Based on their recent payday loan experience:
After carrying out a detailed analysis of the findings of the Harris Interactive survey, it is thus clear that the market is completely satisfied with payday lending, and the businesses that are providing these loans.
That is the reality. It is not an assumption that these loans are making people bankrupt. In fact, payday lending is achieving just the opposite of this. These loans are helping people have cash in hand so that they do not have to file for bankruptcy.
A huge majority of people who take a payday loan understand them well and are willing to make informed decisions. They want to use the money responsibly and will do everything they can to repay the loan on time. More than nine in ten individuals are saying that they weigh the benefits and risks carefully before taking the loan, and are very happy with the end results. The overall math is working for them.
It is good that the lawmakers should want to protect consumer interest. They should be doing this. But it’s time to realize that the risk is not from payday lending. All that they need to do is ask those people who are taking these loans. They will realize that they find payday lending most useful.
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