07
Aug
According to an industry insider, this is what a Short Term Loan Customer looks like:
- There are 60 million unbanked or under-banked Americans
- 25 million payday loans a year in the U.S.
- These people exist outside of the financial mainstream
- They have exhausted all resources – friends, family, credit cards
- Banks and Credit unions will not service these consumers
- Online payday customers are very sophisticated:
o Average age is 43
o Predominantly women
o Have a computer and internet access
o Average income of $45k a year
o Over half have some college
o Over one third own their home
o All have bank accounts
o All have jobs
- These are not poor people, they are poor money managers
- Studies by the Federal Reserve and several universities show restricting consumers access to payday loans results in a spike in bank overdraft fees, an increase in foreclosures and bankruptcies
