2020年9月16日

4.1. Demographics. Many borrowers inside our sample were of working age.

Figure 1: Respondent age bracket

2000 dollar installment loans

Respondent age group	%
18-24	6
25-34	24
35-44	27
45-54	21
55-59	10
60-64	7
65+	6

As shown in Figure 1, 72 % of participants had been between 25 and 54 years old. Eighty-three % lived within an area that is urban and 55 per cent rented their house (while 32 per cent owned a house with a home loan and nine per cent owned one without a home loan. )

More respondents had incomes that are low-to-moderate.

Figure 2: Domestic earnings

Home income	%
not as much as $32K	28
$32K –

As shown in Figure 2, over 50 per cent lived in households with yearly incomes under $55,000, and over 70 per cent lived in households with incomes under $80,000. But, 20 per cent reported home incomes surpassing $80,000, with seven % over $120,000, demonstrating that cash advance use just isn’t limited to low-income Canadians. Footnote 11

This information that is demographic assist FCAC to tailor academic resources.

4.2. Understanding expenses

Pay day loans are a way that is expensive borrow funds. As shown in Figure 3 Footnote 12, these are typically much more high priced than many other short-term credit choices.

Figure 3: pay day loan price vs. Different ways of borrowing (According to a $300 loan taken for two weeks)

Borrowing from personal credit line	Overdraft security on a bank-account	cash loan on credit cards	pay day loan
$5.81	$7.19	$7.42	$63.00

Not surprisingly, fewer than 50 % of participants comprehended that a payday loan is more costly than a highly skilled stability or cash loan on a charge card (see Figure 4). This means that that nearly all participants weren’t alert to the relative expenses of most credit that is short-term that will be utilizing pay day loans more regularly because of this.

This shows the requirement to increase customer understanding concerning the general costs of varied credit services and products.

Figure 4: nearly all respondents would not properly see that payday advances cost significantly more than a balance that is outstanding cash loan on credit cards.

Response	Percentage
Right	43
Wrong	57

4.3. Measurements of loans

Many payday advances taken down by participants had been fairly tiny in value.

As shown in Figure 5, three-quarters reported loans of $1,000 or less, while over fifty percent (55 per cent) reported loans of $500 or less. Twenty % reported loans of $500-$1,000, while just four per cent reported loans of $1,001-$1,500.

Figure 5: Can you calculate that total value associated with the payday that is last you took?

Projected value	%
$1 – $500	55
$501 – $1000	20
$1001 – $1500	4
$1501 or higher	7
favor to not respond to	14

In Canada, a regulated cash advance cannot go beyond $1,500, yet seven per cent stated the worth of these loan had been over $1,500. It’s confusing whether these respondents had been citing the sum total price of borrowing (including interest and charges), had been thinking about a different type of borrowing, or had the ability to access bigger payday-style loans off their loan providers. Almost 50 % of people who accessed loans over $1,500 accessed their loans online, that may suggest that larger loans are increasingly being accessed in this way.

4.4. Repayment of loans

While pay day loans are made to bridge customers with their next paycheque, one-third utilized sources aside from their paycheque to settle their final loan.

Some participants reported looking at cost cost savings records, taking right out new pay day loans from another loan provider, borrowing from buddies or family members, or utilizing banking account overdrafts to settle their outstanding pay day loans (see Figure 6 Footnote 13 ). Just just What continues to be not clear is the reason why they didn’t access these resources of funds previously—instead of taking right out loans that are payday. This might be another indicator that borrowers usually do not completely understand that payday loans cost significantly more than other credit choices and underlines the necessity for relevant customer training resources.

Figure 6: exactly How have you typically repaid the total amount owed for the payday loan(s)? (pick all of that apply)

Supply	%
Accessed cash through credit line	2
Other	2
lent from a bank or credit union	2
went along to pawnbroker	2
Accessed money through bank card	3
never have yet paid down my loan(s)	4
Sold something	4
Cashed in RRSP or other assets	4
utilized overdraft on a banking account	5
Borrowed from buddies or household	7
Took out an innovative new payday loan(s)	7
Took out funds from a checking account	13
applied my paycheque	70

4.5. Known reasons for loans

Many participants reported taking out fully pay day loans to pay for expenses that are necessary.

As shown in Figure 7, almost 50 % of participants (45 per cent) said they typically utilized loans that are payday unanticipated necessary costs, such as for instance automobile repairs. Almost as numerous (41 per cent) stated they typically utilized loans that are payday recurring and therefore expected necessary costs, such as for example lease or bills. Footnote 14