Payday Loan Times

The Canadian Payday Loan Association (CPLA) just released the first statistically-relevant survey ever completed of payday loan customers in Manitoba.

Here are results from it:

Demographics of Payday Loan Customers
Contrary to conventional assumptions, the average payday loan customer is employed, educated and is not representative of “low income” households.

• The average personal cash loan customer is 38 years old
• 77% of customers are currently employed full-time
• Almost half (46%) have completed post-secondary education
• Overall household income reported for payday loan customers tends to be either on par with - or ahead of - the general Manitoba population.  Notably, only 13% of payday customers reported household income of less than $25,000 compared to 28% of the general Manitoba population.  39% of payday loan customers reported household income in the $25,000-$50,000 bracket compared to 30% of the general Manitoba population.
• Another 39% of cash advance payday loan customers reported income of $50,000 or more compared to 42% of the Manitoba population with the same household income.

Personal Credit Profile
Although some have suggested people use payday loans because they have no other option, the surveys demonstrate that customers have access to a wide variety of credit products, however still choose a payday loan for short-term, small-sum borrowing.

• Customers owe an average of $24,357 to various financial institutions, excluding mortgages.
• Customers have access to a variety of credit options, but choose a payday loan over a line of credit, credit card, retail card, overdraft or other forms of credit largely due to the “convenience” of the payday loan product, “ease of use” and “long hours of operation.”
• Only 15% of customers indicated they used a no fax payday loan because they had “no other option.”