News & Resources

Short term loans being increasingly used by consumers in Ohio

Aug 06, 2012 Sean Albert

The economic recession had a negative impact on many industries, but it also affected American consumers, leaving them without financial options. For this reason, many individuals turned toward short term loans in order to gain access to funds to pay for necessary expenses. Ohio is one state that is an example of the increasing use of short term lending among consumers. According to recent research by Pew Charitable Trusts, 10 percent of Ohio residents have taken out a short term loan to cover expenses. The state is considered "permissive," meaning laws allow for single-repayment loans with APRs of 391 percent or higher. In Ohio, the maximum amount that can be taken out through a short term lender is $500 and the duration of the loan is 31 days or more, states the research. The Dayton Daily News conducted a study and found that state residents are increasingly using these short term loans to pay for necessary costs. Additionally, many are turning to pawn shops to gain access to funds. As the economy turned downward, many banks tightened their restrictions on loans, leaving consumers with fewer options. Therefore, short term lenders and pawn shops now serve as a large source of lending for individuals who are looking to cover emergency expenses, states the news source.