Four Interesting Payday Loan Findings

by

Holly Petherbridge

Four payday loan findings were recently published by Clarity For Consumers, a group who works to bring clarity to credit reports to individuals. The larger the knowledge base an individual has, the more informed functional decisions will be mad when financial problems occur.

The first finding stated that for every ten borrowers, one of those was using the low cost payday loan for car repairs. Automobile repairs are one of the more advertised ways to use these short-term loans. In fact, the findings came out to show that the majority of the people were getting their tires repaired. Whether or not these findings are truly accurate, it does show that many borrowers are using the payday loans lenders as suggested.

The second finding showed that about 65% took out a payday loan within 24 hours of contemplating a purchase. Impulsive shopping is widespread in our society. Credit cards have given people the avenue to shop beyond their means. When there are no credit cards to use, people continue to shop by other means. An online payday loan is obtainable within 24 hours leaving very little room to rethink a purchase. To prevent this type of shopping, it is always good to wait a week before purchasing the product. Give yourself time to possibly talk yourself out of it or at least look to find it on sale somewhere else. Payday loans lenders are never a good idea to use for impulsive shopping especially if your income will not support the full payoff in a few short weeks.

Four out of people who were surveyed admitted to knowing how much a payday loan will cost. Three quarters of the people were aware of the interest rates associated with the loan. This leaves one in five users taking out a payday loan without any idea of how much the loan would cost. Twenty-five percent had no knowledge of the interest rate which would be applied to their loan. These last two findings are overwhelmingly disturbing to think that individuals are making money transactions without knowing the costs involved. It is nice to see that the majority of people are informed about these short-term loans.

Forty-eight percent of the consumers who took out the payday loans and repaid the loans back felt good about their experience with the short-term loans. When used according to the time payoff time frame, these loans can be quite cost effective. The initial cost of the loan, which is added to the payoff balance, is most often a more effective way of keeping credit card and bank fees away. People who take them out and pay them back with their next paycheck are more likely to have had a pleasant experience; couple that with an outstanding customer service team and the experience will keep customers returning for future loans when finances become too overwhelming.

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