When looking at the history of payday loans and those who most commonly use them, there is one thing in common, they have all faced some form of financial difficulty. In this article, we will be providing you with information about who tends to apply for these loans as well as the reasons why.
Young Families
When looking into who typically tends to apply for a payday loan, it is often those in the younger age groups. With many young families moving out for the first time, there are a number of younger families that leaning on the use of loans for bad credit and payday loans when faced with a financial emergency as they are unable to dip into savings or even receive financial help from their parents at the time.
Those Faced with A Financial Emergency
Even if you are someone who has their finances in order, there could come a time in life where a financial emergency stretched your budget to a breaking point. With many of those applying for these loans not having any form of savings in their bank, this has become a highly popular way for them to make ends meet and pay back the money later on down the line. It is important to note, however, that these loan types should be used as a last resort if you are unable to pay of your loan using funds from your savings or borrowing from elsewhere.
People Struggling with Unexpected Bills
When you are working paycheck to paycheck, it can often be challenging to make ends meet and still have some disposable income left, however, it is not impossible. With many relying on either their savings or a payday loan to make sure that their bills are being covered, this can be used to pay of an unexpected bill. These loan types can then be paid back at a later date, allowing you to spread the cost more evenly and not damage the future of your finances. With every application damaging your credit score, it is important to make sure that you are being wise with these applications as it could damage the future of your finances if left unchecked.
First Time Buyers
The final group of people that are likely to apply for loans are first time buyers. With many first-time buyers applying for mortgages in order to afford their homes, there are several different loan types such as payday loans that they may need to apply for throughout the course of them owning their home. With the potential for short term loans being used for home repairs and several other small changes that may need to be made, the use of lines for first-time buyers is quite common, particularly if they have no savings to fall back on.
With this in mind, there are several reasons as to why each one of these individuals may require the use of a payday loan?