The COVID-19 coronavirus has significantly affected hundreds of millions of people across the world, including Americans, Asians, Africans, and Europeans and so on. The effect of the pandemic has been felt in every industry – from hospitality to finance, manufacturing, restaurants and more. But how exactly is the effect of pandemic affecting the payday loan industry? Are people applying more payday loans during the pandemic? Well, let’s find out!
Overall payday loan application volume has significantly grown due to COVID-19 Coronavirus. Millions of people have filled for unemployment in America and other countries, and this number has been increasing with time. due to the shuttering of countless number of “non-essential” businesses, and the overall worldwide ripple effects of the pandemic on the world economy, many people have been struggling financially.
That means that overall, the number of people in need of quick cash has grown, and thereby increasing the number of people applying for payday loans.
What are the evidences of this increase?
First, the payday loan application volume has significantly increased since countries across the world begin shuttering the economy. The increase in the volume is a clear indication that many people have been resorting to payday loans to meet their financial obligations. This is despite the fact that many countries sent, and, or have been sending cash deposits to citizens to cushion them from loss of income.
Secondly, some people have bad or no credits. This means that banks cannot give them loans despite the fact that they could be very much in need of cash during this pandemic. Shirt-term loans remain the immediate help for this group of people. And since they cannot qualify for bank loan, they have turned to payday loans, which is their only option.
Thirdly, government and humanitarian assistance have been delaying. So, people who are in need of quick cash to adequately cover their expenses as they wait for the assistance from the government or any other agency have been turning to payday loans.
Also, most phone-based lending apps, which offer payday loans, have seen a dramatic jump their profits in the last several months since the impact of coronavirus pandemic on the economy began to be felt. These lending apps have seen dramatic jump in payday loan applications in the last few months.
Reasons why people applying more payday loans during the pandemic?
When you look around and analyze the statistics and economic situation since the COVID-19 breakout, you will realize that people need more quick loans today than ever before. There are so many reasons for this.
For example, people have lost businesses. Some businesses have shut down for good while other have been struggling to remain afloat during the pandemic. Some of the owners and employees of these businesses have turned to payday loans.
Also, many people have lost their jobs and this has led to an increase in dependency ratio. So, people who can still secure payday loans are going for it to support their dependents.