You know you are blogging about a big industry when it gets referenced on the Huffington Post. If you are not familiar with the Huffington Post, it is a popular news site that talks about many industries and various news related topics. They actually published some great stats about the use payday loans.
Did you know 7 of 10 payday loan users actually use the money to pay their bills? That is right, they use their payday loan money to pay for cable, water and electricity. It seems as if some better planning could help them not have to pay their bills with a loan.
Payday loans have become more popular due to the current economic climate and the large amount of people who have lost their job. People are often left scrambling trying to cover themselves and pay their bills on time. The article goes on to highlight how much interest and fees are associated with these types of short term loans. The piece of data that stuck out to me the most was the range of interest that some states allow on payday loans. Some states are as low at 15% which is around what you would pay for a credit card transaction while others go all the way up to 400%. That is ridiculous!
There are definitely some other interesting stats such as the levels of income that often acquire these advances. Here is the breakdown:
Under $15K – 9%
$15K-$25K – 11%
$25-$30K – 8%
$30K-$40K – 8%
$40K-$50K – 5%
$50K-$75K – 4%
$75K-$100K – 3%
The fact that someone who is making over $50K and is in need of a cash advance is astonishing. Why do people not plan or save better? We all know payday loans can help you out of a jam but if you are making good money you should be responsible enough to not have to get this type of loan.