Figure 1: Respondent generation

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

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

Figure 2: Domestic earnings

As shown in Figure 2, over 50 per cent lived in households with yearly incomes under $55,000, and over 70 percent lived in households with incomes under $80,000. Nonetheless, 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 demographic information will assist FCAC to tailor academic resources.

4.2. Understanding expenses

Pay day loans are a way that is expensive borrow cash. As shown in Figure 3 Footnote 12, they have been a lot more high priced than many other short-term credit choices.

Figure 3: Payday loan cost vs. Alternative methods of borrowing (considering a $300 loan taken for two weeks)

Regardless of this, less than 50 % of participants comprehended that a payday loan is higher priced than a superb stability or advance loan on a charge card (see Figure 4). This means that that most participants weren’t conscious of the general expenses of all of the short-term credit choices and could be utilizing pay day loans more frequently because of this.

This shows the requirement to increase customer understanding concerning the general expenses of numerous credit items.

Figure 4: nearly all participants would not properly see that payday loans cost significantly more than an outstanding stability or cash loan on credit cards.

4.3. Size of loans

Most loans that are payday away by participants had been fairly little in value.

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

Figure 5: Could you calculate that total value associated with final cash advance you took?

In Canada, a payday that is regulated cannot go beyond $1,500, yet seven per cent stated the worthiness of the loan had been over $1,500. Its not clear whether these participants had been https://quickinstallmentloans.com citing the full 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 might indicate that bigger loans are increasingly being accessed that way.

4.4. Repayment of loans

While pay day loans are made to bridge consumers with their paycheque that is next used sources except that their paycheque to settle their final loan.

Some participants reported embracing cost cost savings records, taking out fully new payday advances from another lender, borrowing from buddies or household, or bank that is using overdrafts to settle their outstanding pay day loans (see Figure 6 Footnote 13 ). Just just What stays not clear is just why they didn’t access these sourced elements of funds previously—instead of taking right out loans that are payday. This may be another indicator that borrowers usually do not understand that payday fully loans cost more than other credit choices and underlines the necessity for associated customer training resources.

Figure 6: How have you typically reimbursed the quantity owed for the payday loan(s)? (pick all of that apply)

4.5. Good reasons for loans

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

As shown in Figure 7, very nearly 1 / 2 of respondents (45 per cent) stated they typically utilized payday advances for unanticipated necessary costs, such as for instance vehicle repairs. Almost as much (41 %) stated they typically utilized payday advances for recurring and therefore expected necessary expenses, such as for instance lease or utility bills. Footnote 14