Wilmington, DE-- (SBWIRE) -- 12/05/2011 -- PersonalCashAdvance.com, a site devoted to providing information on loans, has posted the data from a new study out of Utah that flatly contradicts the popularly held belief that lower-income people cannot afford cash advances. The results were drawn from data provided by Utah payday lenders as a result of new laws mandating the disclosure of certain information.
According to the study, 99.9 percent of all cash advances issued are repaid in full before the term hits the legal extension maximum of ten weeks. Lenders submit the robust repayment statistic as proof that payday loans are indeed financially manageable, even for borrowers with modest incomes.
“The results from the Utah study will hopefully do wonders in continuing to rehabilitate the image of the payday loan industry. When nearly 100 percent of cash advances are paid prior to the mandatory legal deadline, it’s hard to argue, as some critics do, that the loans are simply predatory traps designed to ensnare the poor and financially unstable. The truth is, most payday borrowers do pay back their loans, and they do so within a time frame that keeps interest charges affordable,” said Melissa Waters, public relations representative for Personal Cash Advance.
Lenders say that the low default rate in Utah, approximately 0.01 percent of all cash advances, is the product of reasonable legal limits on extensions and loans of manageable sizes relative to the borrower’s income. As part of the borrower approval process, lenders determine the appropriate amount an applicant may feasibly borrow on his or her monthly income.
“Despite the efforts of the media and many consumers groups to demonize payday lenders, the statistics paint a very different story. Borrowers are repaying their cash advances in full and before the legal extension limit sets in, and that phenomenon would not be occurring if predatory lending practices were indeed taking place,” said Neil Cutting, spokesman for PCA.
If you have loan questions, please call 800-920-7430.