Payday Loans are among the most popular loans, especially during the pandemic when more than 14 million Canadian opted to take the loan. But what makes it so desirable, and who are the people who most benefit from these types of loans? Let’s find out from the data provided by the Government of Canada’s website.
What are these Loans?
Let’s first address what is this loan all about. We must have come across the term in the storefront of online ads, and whether you prefer taking loans or not, it may not be a bad idea to know the basics of it in case you do find yourself applying for a loan in the future.
who use payday loans canada – Government Canada Statistics -RedPayday
Payday loans are short term loans for people with low income or someone with a bad credit score. These loans are highly convenient to get approved for and therefore very popular among people who has financial troubles. Most loans are extremely difficult to apply for and get approved for. Payday allows lenders to apply with minimal paperwork; all you need is proof of steady income, perhaps some proof of employment. In this valid banking account, the money will be sent, and you also need to be a Canadian citizen over the age of 18 and with these simple requirements, anyone can apply for a loan. The best part of these loans, however, is the fact that you do not need to pledge anything to the bank making this one of the safest forms of loans currently available and when you pair that up, these types of loans are guaranteed and need to credit check, you can figure out why this is gaining such popularity amount general people.
Who Uses these loans, and is it even useful?
According to a public survey listed on an official Canadian government website, payday loans are most popular among people aged between 25 – 49 years of age. This makes perfect sense as this is where most people face financial troubles, as older folks are much likely to be better off having a pension fund. Divorced or single parents are twice more likely to avail this loan than their counterparts.
People earning lower than 35 thousand Canadian dollars is also the most likely to take up the loan, reinforcing the fact that this kind of loan is mainly catered to people who have tough financial crunches.
Survey also show the average amount of money lent was around $500 and people generally took on average four weeks to pay off the loan; this directly correlates that the sole purpose of this kind of loan is for short term money crunch and should not be used for term use as then interests can go high.
And the most important part of the survey was when asked what they used the money for, a staggering 91% of the participant acknowledged that they used the money for urgent financial needs like car repair, electricity bill and mortgage, and they were satisfied with the terms of the loans as they saved a significant amount even paying the interest of the loan than paying off the fines. This goes to show how much payday loans have evolved over the years and has impacted the lives of working-class Canadians and provided them with an easy solution for their money problem.
There has been a fair share of skepticism concerning the usefulness of payday loans; many argued that these loans have a high-interest rate and are not very useful. But these data clearly shows how people benefit from these loans and how it is improving their lives. The fact that there are so few options in the market for general people with lower income brackets to utilize banking facilities, a payday loan is a great option for them. To learn more about payday loans and get a free quote visit our website redpayday.ca to learn more.