Against the background of the financial situation in the country and changes in prices on store shelves, we decided to understand the statistics and find out who takes online payday loans Iowa and for what purpose. These are unsecured loans that can be used for literally everything. Loans can be issued online, with no paperwork involved.
Myth: Only young people take out payday loans
Many people think that microfinance institutions take advantage of retirees. For some reason, it is believed that they cannot make an informed decision on their own, and there are only scammers around who are just waiting for another grandmother to come to them. This is such a common myth that it is almost impossible to fight it, but we will try again.
According to the results of the recent research, only 1.1% of MFI clients are over 60, while the largest segments are borrowers are aged 19 to 40. Thus, almost 90% of MFI clients are young people.
Each city in Iowa has its own policies and age restrictions. For more details, you can review pages related to the city you reside in, for instance, payday loans Des Moines and payday loans in Birmingham. The links will take you to detailed guidelines for payday lending in each particular city of Iowa. You can visit these pages to read reviews about current lenders in your city and check out their ratings.
What are loans used for?
According to the statistics, the most popular reasons for online payday loans in Iowa are the need to buy gifts, to pay for medical and beauty services, and to purchase electronics:
- gifts – 20%
- medicine and beauty – 18%
- electronics and household appliances – 16%
- debt consolidation – 9%
- car repairs/purchase- 5%
- education – 4%
- home improvement – 3.4%
- entertainment and vacation – 2.5%
If you lack money for entertainment, then this is clearly not a reason to take out a payday loan, at least MFI clients think so. Almost nobody marks this point. But there is a high demand for education at an early and late age. It can be assumed that in the first case it is the remuneration of tutors and courses, while for mature people it is a way to get a new profession and, as a result, new types of earnings. Some people prefer to prepare in this way before a future pension when every additional income is important.
Which gender uses payday loans more often?
This year, male-only borrowers make up 57% of the payday loans and female-only borrowers make up 43% of the total in Iowa.
Gifts and beauty most often refer to impulsive and emotional purchases. It is logical that girls are twice as likely to choose medicine and beauty, but it is interesting that young people in the same proportion take payday loans for gifts more often. The three leaders are closed by electronic and household appliances. We dare to assume that here we are talking more often about smartphones or tablets than about washing machines and irons.
In general, this choice is great for the age categories that we have turned out, prone to spontaneity, which is not yet inherent in prudence. Interestingly, gifts are most often taken either by very young people or old people. In the first case, the decision looks more emotional, in the second, it rather shows a not very high standard of living with a high desire to do something pleasant for family and friends.
Medicine and beauty are of the greatest concern for the young and the elderly, which also seems logical. Young people are preoccupied with their own appearance, while older people spend part of their funds on medicine and treatment of diseases acquired during their lifetime.
Household appliances begin to interest people as their age increases. It is designed to simplify life.
The number of car loans also depends on age. Over time, a person’s solvency decreases, a personal car also does not get younger, and often it is no longer possible to change a car, you have to invest more in repairs. At the same time, men are twice as likely to use payday loans for car repairs.
Parents are less likely to take out loans
Almost 70% of MFI clients indicate that they have neither children nor dependents. It turns out that young parents, despite the fact that they often feel the need for finance, are in no hurry to contact microfinance institutions.
What are the reasons for this? It is difficult to say, although it is likely that relatives are more likely to help young parents, and caring for a child makes people more responsible and less impulsive. After all, if someone really needs money, they apply for a loan: about 20% of clients reported having one child in the family and about 10% of clients reported having 2 children.
Payday loans and financial literacy
According to the survey, 61.5% of MFI clients indicated that they have a secondary education. Bachelors and masters accounted for about 30%, and doctors and postgraduates – 2%.
On the one hand, it can be said that most of those who take an online payday loan in Iowa have secondary or incomplete secondary education, but one should understand that the presence or absence of higher education has nothing to do with general financial literacy. As a rule, people with higher education have higher wages.
You always have to study and learn something new for yourself, regardless of your degree. For our part, we are doing our best to raise this level by publishing useful articles and tips for our readers.