Young people are pursuing alternative finance
options when they need fast cash. These solutions, including pawn shop and short term loans, can be viable opportunities to cover potential financial issues when an emergency arises. For people in this age bracket, many of whom are just beginning their careers not long after college graduation, an unexpected expense could mean disaster.
A recent Think Finance survey found younger Americans are relying on nontraditional loans when an unexpected cost becomes urgent. Lenders may want to take note of the results and begin marketing toward a younger crowd that could benefit greatly from fast cash in an emergency. Alternative financing popular no matter salary
Researchers at Think Finance set out to disprove the theory that only the poorest of consumers need to rely on loans to cover unforeseen expenses. They found Millennials - people between 18 and 34 years old - are relying heavily on alternative financial services in a costly situation, especially when they do not use a bank regularly, and are largely satisfied with their experience. People under 18 are not qualified to take out non traditional loans, including short term advances, instapaydayloan.com explained. The source said because teens younger than that, though they may have a job, are largely still in high school and do not have the means to pay the sum back. The rule was put in place to not only protect consumers, but also lenders, who risk losing money. The Think Finance survey noted there are certain types of loans people rely on regardless of income, including pawn shop loans and prepaid debit cards. While 29 percent of those who make less than $25,000 annually have relied on pawn brokers for fast cash in the past, the same can be said about 21 percent of Millennials who make between $50,000 and $74,999. Survey reverses common thinking
Researchers found there were certain non traditional loans used by a younger set that have a mid to high salaries. Short term loans, in particular, were more common for people in a higher income bracket. Fifteen percent of people who made less than $25,000 a year have applied for short term loans, the survey said, while 22 percent of those making between $50,000 and $74,999 annually have used the sums to cover an expense. The same trend can be seen in the bank direct deposit advance and other emergency cash sectors. More than 80 percent of those who have used these services had either a positive or neutral experience. "This study confirms that young people across the spectrum have a need for the convenience, utility and flexibility that alternative financial services provide," Think Finance CEO Ken Rees explained.