Payday loan, payday lending, financial capabilities, consumer finances


The field of social work is becoming increasingly savvy regarding the financial lives of people, but despite seeming conclusive and resolved, knowledge about payday loan borrowing is still nascent. To understand it more thoroughly, this study employed descriptive and inferential multivariate quantitative methods using cross-sectional secondary data from the 2013 Survey of Consumer Finances (n = 6015). Results revealed that many of the simple differences found in descriptive analyses of demographic characteristics no longer predict differential payday loan borrowing when controlling for other characteristics. Contrary to prior research, results showed that payday loan borrowers are not more likely to be female, younger, unmarried, lower income, or Hispanic. They are, however, more likely to be African-American, to lack a college degree, and to live in a home they do not own. Recipients of social assistance were approximately five times more likely (OR = 5.2) to be payday loan borrowers than those who did not receive social assistance. The absence of statistically significant differences in the proportion of payday borrowers in income quintiles is notable. Thispaper contributes to addressing the Social Welfare Grand Challenge of building financial capabilities.

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