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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

Abstract

Pay day loans are controversial high-cost, short-term financial products, prohibited in a lot of U.S. states. But debates surrounding their advantages to consumers carry on. We determine the results of pay day loans on customers by utilizing a unique information set including 99% of loans authorized in britain over a period that is two-year to credit files. Employing a regression discontinuity research design, our outcomes show that payday advances offer short-lived liquidity gains and encourage consumers to battle credit that is additional.Read More