Fewer Members Are Taking Out Short-Term, Small-Dollar Loans: For Now
Small dollar loans, such as payday, auto-title, and shorter-term installment loans, are often less widely used after large injections of cash, such as tax refunds. We typically see a consistent number of members using these loans throughout the year.
With so many members receiving stimulus payments (almost 60%), those stimulus payments themselves might be taking the place of the typical short term loan. However, as 84% of members indicated they are either unemployed or underemployed, we expect to see use of small-dollar loan products to accelerate as we move into the summer and government benefits subside.
