ALEXANDRIA, Va. – More than nine out of 10 payday-loan borrowers are satisfied with their experience, cost and repayment process, according to the results of a survey by Harris Interactive released Dec. 4. The study was commissioned by Community Financial Services Association of America and was conducted via telephone among 1,004 respondents who are customers of the storefront companies within the association, and who took out a loan and paid it during summer 2013.
There are efforts nationwide, including some in Rhode Island, to reduce payday lending, which some claim has unreasonably high interest rates and can drag borrowers into a downward spiral of debt. The United Way of Rhode Island, in collaboration with the Capital Good Fund, opened a financial counseling and loan center in Woonsocket Nov. 4. The initiative is called “Cash Now, Savings Later: An Alternative to Payday Lending.”
The study by the CFSA, however, found consumers want the payday lending choice.
“The great majority of borrowers we surveyed said that, for them, payday loans are an important and valuable credit option that helps them overcome financial shortfalls,” said Chairman of the Harris Poll at Harris Interactive. “Our survey findings reveal almost all borrowers understood the cost of their loans and how long it would take to repay them.’
The survey found that in contrast to common misconceptions about payday loans, borrowers understand and choose the service over other financial services offered by banks and non-bank lenders.