How important is payday lending to local communities

More and more families and shared households are facing a common challenge on a wider scale. The challenge is the shortage of funds. The economy’s current state as well as the surge of job losses in this nation has left many families turning to new alternatives that would have never been previously considered. We hear many testimonies and have been called “life savers” in many cases during hard times. One customer reported that she was able to use a cash advance to avoid the high Non-Sufficient Funds (NSF – learn more here) charged by the banks. The average bank fee for (NSF) $35 per charge, compared to the finance fees charged by most payday lending companies which start at around $15-$20 and up. Many have depleted savings, and borrow money from friends and family to get by during critical times. Many have taken on jobs that pay far less than what the household was accustomed to bringing in. While the unemployment rate is steady and job creation and development has been slow, many have begun to entertain the thought of obtaining short term loans. This is where the Payday Loan industry fits into the picture.

Who are some of the consumers of payday loans? Having to borrow money is obviously not something most families like to report. However, according to the Survey of Consumer Finance Data (SCF) the average consumer of a payday loan is approximately aged 36-39, is Caucasian, and has some college education, but no degree. Another %19 of borrowers taking out payday loans do have a college degree. Industry figures as well as the SCF’s data show that the mean income for families who took out a cash advance payday loans was in the range but not much over $32,000, whereas the households bringing an income closer to $80,000 and above were less likely to take out a payday loan. The Federation of International Civil Servants Association reports that their payday loan borrowers have an average household income of more than $40,000. Another report stated that the average family income for families taking out payday loans ranged between $25,000 to $49,000.

Much can be said from this data. Not only does it thwart the previous information stating that guaranteed payday loans were only utilized by low income households, but it shows the frequent use of these loans by families with both low income and middle class incomes. It also clearly addresses the necessity of having access to this type of service for both income levels.

4. Find new ways to save or even make money

Become a savvy shopper. Cut coupons if need be and watch for deals online or in publications. Cut down on extravagances. Eat dinner in more, go to a matinee instead of an evening film and look for discount tickets to entertainment events. Websites like and can be very useful when you’re trying to find something to do that doesn’t cost much money. If you have any assets that you don’t need (electronics, jewelry, cars) sell them on eBay or through another venue. Take that money and pay it to your lenders and credit card companies.

The basics of getting out of debt aren’t complicated, but they do certainly take some self –restraint. Don’t get discouraged if it takes a while to get out of debt. You’re not alone. Americans are in nearly $2.4 trillion of debt, which averages out to $7,800 for every U.S. citizen. If you’re already on the path to paying back your debt, you’re doing better than most people.