Research Report Research on Financial Behaviors and Use of Small-Dollar Loans and Financial Services
Subtitle
Literature Review
Brett Theodos, Jessica F. Compton
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Millions of American households, especially those in the bottom half of the income distribution, use nonbank credit products. This credit, while small in initial denomination, can add up to significant debt burdens for those who can least afford it. Yet, the extensive use of alternative financial sector services indicates that consumers perceive such services to be useful or necessary. This summary provides an overview of research on this sector. It reviews literature on five small-dollar credit products and financial services: auto title loans, pawnshops, payday lending, refund anticipation loans and checks, and rent-to-own borrowing.
Research Areas Wealth and financial well-being
Tags Asset and debts
Policy Centers Center on Labor, Human Services, and Population