Online Payday Loans are still needed even after Stimulus Checks
Many people, especially those with no regular income, have spent Stimulus Check money to cover their debts, so Payday Loans are still popular nowadays.
The coronavirus pandemic has had a huge impact on people, as some of them found themselves unemployed and had to spend money on treatment and regular living needs. Even though people have received Stimulus Checks, they still need funding to keep up with the costs. Unfortunately, according to the Federal Reserve Bank of New York, about 35% of the Stimulus Check money was spent to get people out of existing debts. Often these are the people who receive government payments (such as pensions or disability benefits) and who do not have a regular income to pay off their debts.
Financial services about lending business development
Most likely you know that one of the leading online loan comparison platforms is COMPACOM. The leading financial expert of COMPACOM says “Short-term Online Payday Loans, like bad credit Personal Loans, will not lose their popularity”. According to COMPACOM's experience, people continue to apply for short-term Payday Loans despite help from the government. Thus, the platform claims that these loans, and especially the Payday Loan, will remain popular despite the Stimulus Check and other payments.
Bankrate also compares loans and offers financial advice, and the platform is also convinced that people will need money no matter what. As Bankrate itself says, even when the US economy begins to recover from the pandemic, people still need loans that enable them to get a loan in a difficult financial situation.
Leading US economists expect Payday Loan demand growth to pick up again soon as consumer spending recovers.
The Survey of Consumer Expectations (SCE)
What financial situation awaits the Americans in the near future? To find out, The Survey of Consumer Expectations was conducted. Below you can explore the main findings of the survey:
- The financial situation of households has deteriorated. Unfortunately, no improvement is expected during the year.
- Average probability of loan default decreased by 0.7% from 10.1% to 9.6%
However, it is worth facing the truth. We all face urgent difficulties from time to time that need to be solved as quickly as possible. Where can you get emergency funding if you've already spent Stimulus Check money to pay off previous debts and buy groceries and essentials? How can you cover unexpected expenses such as car repairs, urgent purchase, medical treatment and so on? Thus, Payday Loan is still a simple and convenient option for most borrowers.
What are the changes in online Payday Loans during the Stimulus Check period?
In order to understand and trace the changes in short-term online Payday Loans during the issuance of Stimulus Checks to Americans, some analysis is needed. We have studied Google statistics for the request “Payday Loans”. The results show, that after Americans get the Stimulus Check, there is a slight decrease in requests for Online Payday Loans. However, at the same time, you should notice another trend, which shows that soon after the government's help, the demand for short-term loans increased. Thus, the experts' expectations that the Americans will again need additional financial assistance are confirmed. According to Claire Zippel, a senior research analyst with CBPP, many Americans will need financial assistance to bring the US back to the level of hardship it was before the pandemic.
How Stimulus Check funds are spent?
Probably you know that an average American needs about $ 1000- $ 1500 per month to live, pay utility bills, buy food and so on. The first Stimulus Check was $ 1200, the last $ 1600. How is this money spent and how long can you pay for your expenses with government payments?
Many surveys say that about 60% of Stimulus Checks last for a maximum of 3 Months.
How long will Stimulus Check money last?
- 21% lasts up to 1 month
- 26% lasts 1-3 months
- 13% lasts 3-5 months
- 40% find it difficult to answer
Impact of Stimulus Checks on Consumer Financial Behavior
Perhaps you have not thought about it, but when you expect the next financial assistance from the government, you do not carefully plan your budget and your spending. Thus, many people waste their money received in vain if they know that they will receive payments again. Thus, the new payments have a kind of negative impact on the behavior of Americans.
Yes, the influence of Stimulus Checks on American behavior is such that they get used to it and do not try to save money for emergency needs. Moreover, knowing that they can get a new check, people do not see the need to make more money. Thus, when an emergency occurs with this or that person, all Stimulus Check money has already been spent and the person again applies for an Online Payday Loan.
In conclusion, it’s necessary to highlight that Stimulus Checks certainly helped to some extent to alleviate the financial difficulties of Americans. However, the sad conclusion is that government payments still do not solve the problem. Ordinary people still need money to cope with the regular expenses and hardships of life. Moreover, in the current situation, it can be difficult to find suitable ways to make extra money. Thus, Payday Loans remain popular and the demand is likely not to diminish in the future.
