Just How Do Payday Advances Affect Borrowers? Proof through the U.K. Market

Just How Do Payday Advances Affect Borrowers? Proof through the U.K. Market

Payday advances are controversial high-cost, short-term borrowing products, prohibited in several U.S. states. But debates surrounding their advantageous assets to consumers carry on. We assess the consequences of payday advances on customers by making use of a unique information set including 99% of loans authorized in the uk over a two-year duration matched to credit files. Making use of a regression discontinuity research design, our outcomes show that payday advances offer short-lived liquidity gains and encourage consumers to battle extra credit. Continue reading “Just How Do Payday Advances Affect Borrowers? Proof through the U.K. Market”