Demographic Study of Online Payday Loan Consumers

Posted by on Jun 16, 2008 in Articles

Demographic Study of Online Payday Loan Consumers

Government-knows-best bureaucrats would have us believe that payday lenders “prey on the poor and uneducated.”

A payday loan shop employee, on the other hand, told us that most of their customers are educated, make over $30,000 a year and (ironically) work for the government.

We decided to do a demographic study of online payday loan consumers to see where the truth really lies. Let’s take a quick look at the gender, age, household income, ethnicity and household education of visitors to a popular online payday loan website…

Update: For an expanded study featuring a data pool ten times larger than this one, please visit Payday Loan Demographics Study – December 2010.

To ensure objectivity, we only used traffic and visitor demographics data from third-party providers. These third-party data providers estimate number of people, visits and demographics based on data from ISPs (Internet Service Providers), panels and other sources. Like our website, these data providers have no ties to the payday loan industry, trade groups, consumer advocates, etc.

We studied the demographics of visitors to a popular online payday loan provider’s website. The site was visited by an estimated 243,413 people in May, 2008. These people visited an estimated 406,035 times at an average of 7 minutes and 15 seconds (7.1 pages) per visit. Not all of them were payday loan consumers per se but it is pretty fair to say that most of them were thinking of (and in the market for) a payday loan.

Gender Distribution

Most visitors to the payday loan website were women. The gender distribution was 67% female and only 33% male (or two women for every man).

This may surprise many people but is understandable given our current system of rating creditworthiness. A credit rating must be built. Women who were married from a young age and widowed or divorced much later in life would not have had a chance to build such a rating. Sadly, they would have a poor credit rating even if they never defaulted on a single loan.

Age Distribution

In terms of age, there were no surprises here. Most visitors were 18-34 years of age followed by people 35-49 years of age. The age distribution was 43% 18-34, 29% 35-49 and 18% 50+ years of age.

Household Income

Despite what politicians may say, most visitors to the payday loan site had a household income of between $30-60k or $60-100k. The household income distribution was 44% $30-60k, 30% $60-100k and only 19% (less than one in five) earning $0-$30k per year.

It was a shock to learn that almost one in three visitors to the online payday loan provider had a household income of $60-100k per year.

Ethnicity

Most online payday loan consumers were Caucasian, followed by African Americans and Hispanic people. The ethnic distribution was 63% Caucasian, 26% African American, 9% Hispanic and only 2% Asian.

Important: Please see Internet Average below for further clarification.

Household Education

Most visitors to the payday loan provider were college educated. The household education distribution was 49% college, 44% no college and 7% grad school.

Internet Average

In order to get an accurate picture, we also need to take internet average into consideration. For example, there are slightly more women using the internet than men and far more Caucasian people using it that any other ethnicity.

Taking internet average into consideration, the majority of visitors to the payday loan provider were:

  • female
  • 18-34 years of age
  • household income of $30-60k
  • African American
  • college educated

Our results may come as a surprise to politicians pushing “feel-good” payday loan laws that hurt consumers. Despite government claims to the contrary, these third-party demographic data support our firm belief that most online payday loan consumers are educated and gainfully employed.

While these results may not surprise our regular readers, it was sad to see the number of women considering payday loans and shocking to learn that almost one in three visitors to the payday loan site had a household income of $60-100k per year.

Data Sources:
Quantcast
Compete

In the future, Online-Payday-Loans.org would like to make a more detailed and comprehensive analysis. If you have any suggestions or comments, please contact us. Thank you!

Remember: Legal, licensed payday lenders are more expensive than illegal loan sharks. Whenever possible, please consider payday loan alternatives such as P2P lending.

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