This informative article first starred in the St. Louis Beacon, July 18, 2012 – Pew scientists are finding that a lot of borrowers whom remove pay day loans make use of them to pay for ordinary bills, maybe maybe perhaps maybe not unanticipated emergencies — a discovering that contradicts industry marketing that emphasizes pay day loans as short-term choices to protect monetary emergencies.
Based on a report that is newWho Borrows, Where They Borrow and just why,’’ the common debtor takes down a quick payday loan of $375 and renews it eight times before spending it well, investing about $520 on interest. Sixty nine % of study participants stated the very first time they took down a quick payday loan, it had been to pay for a recurring cost, such as for instance lease, resources, credit card debt, mortgage repayments or meals. Simply 16 % stated they paid for an automobile fix or crisis expense that is medical.
“Thus it would appear that the cash advance industry is attempting to sell a product that few individuals utilize as designed and that imposes debt that is regularly more pricey and longer lasting than advertised,’’ the report concluded. Read more »