Intercollegiate Study Links Payday Loans to Financial Survival

Additional support for the theory that payday loans contribute to the financial survival of consumers is available in the intercollegiate study “An Experimental Analysis of the Demand for Payday Loans” by Bart Wilson, David Findlay, James Meehan, Charissa Wellford and Karl Schurter. If used responsibly, faxless payday loans help consumers to handle financial shocks like illness, car repair or similar situations that challenge budgets.

Payday Loans

No fax payday loans has been a fast-growing industry

The growth of the industry was predicated largely by the fact that traditional banking pulled out of the small-scale consumer loan arena and bank consolidations across the country produced greater numbers of consumers who were un-served or under-served by the banking establishment. The authors of the study, by recreating the environment that the average payday loan customer faces, examine what effect having access to the loan type has on their ability to manage their financial affairs and avoid traps.

With faxless payday loans, customers survive

What was it that the authors found? They found that payday loans are indeed an effective buffer against expenditure shocks. It raises their financial welfare. For those who do use payday loans during financial emergencies, however, the authors point out that there is a risk element involved, in that use must remain below a certain threshold in order to help consumers avoid creating a recurring debt cycle. However, the, majority of subjects in the experiment benefited from the existence of future use of payday loans.