Inside the world of a payday loan user (Research)
Unique research carried about by Peachy Loans and an infographic released by Peachy is ground-breaking and has revealed much needed data on who payday loan users are and what their habits are. Kristjan Novitski, the founder of Peachy.co.uk said: “We’re releasing our findings to paint a much more focused picture of a typical payday loan customer which we hope goes some way in balancing out the incredibly hard press every part of our industry gets”. Peachy Loans’ research was based on 1,800 people and corresponds with findings from the Department of Business, Innovation and Skills (BIS). This data-rich research of what payday loan users are about provides a fascinating insight about personal finance, money and loans.
Payday loan customers go digital
Our research found that over 80% of people use computers to apply for payday loans. This shows how modern these financial products are. One third of people actually use smartphones like iPhone, Android and BlackBerry to apply for payday loans as well. The rise of smartphones proves that more consumers are getting used to operating their mobile phones when dealing with issues like loans and credit.
The even split between men and women
Unlike other financial products, payday loans have proven that they are pretty much even across what men and women want. Peachy’s infographic found that 51% of users are men and 49% of them are women.
Young professionals make 1/3 of payday loan users
As part of its commitment to responsible lending, Peachy’s research found that one third of the payday loan users are between the ages of 25 – 34. Almost half of payday loan users earn between £1,200 up to £2,000 per month. This ties in with what Kristjan Novitski said: “We also have both a moral and a business responsibility to uphold; our goal is respond to customers who have a need for a short term loan, and who have the means to pay it back.” Just one third of payday loan users in the profile apply for loans with a salary between £600 to £1,200 per month.
Loans and gambling
Research went deeper than most by seeing how payday loan users thought about betting. Around one third of payday loan users have gambled online or gone to betting shops. The majority of payday loan users (70%) do not gamble online or in betting shops. This shows a link between trying to budget for money for immediate use as opposed to using money for lifestyle use on the whole.
Repeat loan applications are the norm
Peachy’s profile research found that the majority of payday loan users (71%) apply for 3 loans in their lifetime. Over 20% have applied for between 1 – 3 payday loans while 7% have applied for a loan once. The diversity in the amount of loans shows that most payday loan users are repeat customers who apply for them when they need them, as opposed to the image that people are applying for dozens of payday loans.
Recommendations from payday loan users happen
79% of payday loan users said they would recommend a good payday loan lender to a friend in need. Kristjan Novitski said: “It’s great to see how 4 in every 5 of our customers would recommend a good payday lender to a friend”. The power of recommendations shows that payday loan lenders who are responsible are rewarded by consumers who trust them.
This pioneering research from Peachy and its accompanying infographic is indicative of a payday loan user that is complex, focused and knows why they are applying for payday loans.
Read more about “portrait of an average customer” here