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Loan Data Analyses – Loan Statistics

Author: Harry Jones And Facted Checked by : Shanie Capper
Last updated on : 12 January 2024

My Quick Loan Analysed 34,000 Payday Loan Applications from 2023: Here Are the Results:

  1. Loan Purpose: 27.1% applied for loans for emergency cash.
  2. Loan Amount: 60.3% opted for loan amounts between £100 and £599.
  3. Monthly Income: 35.3% of applicants earned between £1500 to £1999 per month.
  4. Age: The 28 to 32 age group made up approximately 18.2% of applicants.
  5. Marital Status: 61.8% of applicants were single.
  6. Income Payment Frequency: 32.9% of applicants received their income on a specific day of the month.
  7. Income Type: 70.6% were in full-time employment.
  8. Work Industry: The highest Industry at 13.2% was health & NHS health workers.
  9. Most popular County: Lancashire was the most popular county, with almost 8.8% of the total applications.
  10. Residential Status: 33.8% were renting.
  11. Number of Dependents: A significant 72.1% had 0 dependents.
  12. Loan Duration Months: Nearly 29.4% took out loans over a 3-month period.

Let’s break it down and go into more detail.

1. Loan Purpose

 

Loan Purpose Graph by My Quick Loan

Leading the reasons, 26% of applicants sought loans for emergency cash, highlighting the critical need for immediate access to funds during unforeseen circumstances. Other unspecified needs followed, with around 20% of borrowers citing various personal reasons.

Home improvement projects motivated 12% of applicants, reflecting the importance placed on maintaining and enhancing one’s living space. Utility bills and vehicle expenses each accounted for 10% of the loans, underlining the essential costs of day-to-day living. Debt consolidation and special occasions were the reasons for 5% of applicants respectively, suggesting a proactive approach to managing finances and celebrating significant life events.

Surprisingly, only a small fraction, less than 1%, sought loans for rent or mortgage payments, which may indicate a preference for alternative financial solutions for these substantial and long-term commitments. This array of motivations provides insight into the financial pressures and priorities faced by individuals in the UK.

2. Loan Amount

Loan amount

The data on loan amounts taken out by applicants reveals a significant trend towards smaller, short-term loans, typical of payday lending patterns.

A considerable majority, approximately 59% of the applicants, opted for loan amounts ranging from £100 to £599. This preference aligns with the common characteristics of payday loans, which are often sought for immediate, short-term financial needs and emergencies.

Meanwhile, a smaller yet notable portion, about 19% of borrowers, chose loan amounts between £600 and £1,099, indicating a requirement for slightly larger sums, potentially to cover more substantial expenses or urgent cash needs that exceed the average payday loan bracket.

The remaining applicants varied in their loan choices, with amounts ranging from £1,100 up to the maximum of £5,000.

3. Monthly Income

Monthly Income

The monthly income brackets of the loan applicants reveal a significant concentration in the moderate-income range. Approximately 35.3% of applicants reported monthly incomes between £1,500 and £1,999, highlighting this bracket as the most common among borrowers.

Both the £1,000-£1,499 and £2,000-£2,499 per month income ranges each accounted for about 17.6% of the total applications.

70% of applications came from people earning £1,000 to £2,499 per month.

In contrast, the higher income bracket of £80,000-£84,999 represented less than 1% of the applications, underscoring that the bulk of loan applicants typically come from lower to middle-income tiers. This pattern reflects the economic profiles of individuals most likely to seek out loan solutions.

4. Age

Age of people who take payday loans

The age distribution among the loan applicants highlights a trend towards younger and middle-aged borrowers. The largest age group, those aged 28-32, accounted for approximately 18.2% of the total applications. The 23-27 and 33-37 age brackets followed closely, representing around 17.4% and 16.2%, respectively. This pattern indicates a notable reliance on additional funding within these age ranges.

The 38-42 age group saw a slight decrease in applications, while the 18-22 age category comprised about 9.4% of the total applicants. This suggests that the propensity to seek external financial assistance increases post-18 but tends to decrease slightly as applicants move into their late thirties and beyond.

Even in the senior age brackets, there was some representation, with the 73-77 age group making up a small fraction of the total, less than 1%. This demonstrates that while the need for loans is significantly lower, it still exists among the elderly population.

5. Marital Status

Marital status of payday loan applicants

The marital status of loan applicants shows a dominant trend towards single individuals. Approximately 58.8% of the applicants identified as single, making it the most common marital status among those seeking loans.

Married applicants constituted about 17.6% of the total, while those living with a partner accounted for roughly 8.8%. This data suggests that single individuals are more likely to seek financial assistance through loans compared to their married or partnered counterparts.

6. Income Payment Frequency

Income payment Frequency of payday loan applicants

In examining the payment income frequency of loan applicants, distinct patterns emerge. About 32.4% of the applicants received their income on a specific day of the month, making it the most common payment frequency.

Those who got paid on the last working day of the month represented approximately 23.5% of the total applications. Meanwhile, applicants receiving weekly payments accounted for roughly 13.2%.

7. Income Type

Income type of quick loan applicants

The income types of loan applicants in 2023 show a significant prevalence of full-time employment. Approximately 70.6% of the applicants were in full-time roles, indicating that the majority of those seeking loans are regularly employed.

A smaller yet notable proportion, about 8.8%, were receiving disability benefits. This reflects a segment of the population reliant on such benefits for their primary income.

Part-time workers constituted around 7.4% of the applicants, suggesting that those with less regular or fewer hours of work also seek financial assistance through loans.

Self-employed individuals made up about 5.9% of the quick loan applicants, indicating the presence of entrepreneurial or freelance workers in the loan-seeking demographic. These percentages provide insight into the diverse employment backgrounds of those applying for loans.

8. Work Industry

most popular work industries of consumers taking out payday loans

 

The breakdown of income industries among loan applicants reveals a diverse range of employment sectors. Notably, nearly 29.4% of the applicants chose ‘Other’ or did not specify their occupation, indicating a significant portion of borrowers with varied or unlisted occupations.

Health and NHS healthcare workers constituted approximately 13.2% of the total applicants, reaffirming previous reports that this sector often tops the list for payday loan applicants.

Those employed in the construction industry made up about 11.8%, highlighting the financial needs within this sector.

Additionally, retail workers accounted for roughly 11.2% of the applicants, reflecting the presence of this sector in the payday loan market. These percentages illustrate the wide-ranging employment backgrounds of individuals seeking financial assistance.

9. Most popular County

Most popular county that take out payday loans

In the analysis of the most popular counties for payday loan applications, Lancashire emerged as the top region.

Approximately 8.5% of all the loan applications came from Lancashire, indicating a significant demand for payday loans in this area. This figure highlights Lancashire as a key region in terms of the volume of individuals seeking short-term financial solutions.

10. Residential Status

Residential status of people taking quick payday loans

The residential status of loan applicants demonstrates a diverse range of living situations. Tenants comprised the largest group, with approximately 33.8% of the applicants renting their homes. This indicates a substantial demand for financial assistance among those who do not own property.

Living with parents was the situation for about 26.5% of the applicants, suggesting that a significant number of individuals, possibly younger adults or those in transitional life stages, are seeking loans.

Council tenants made up roughly 17.6% of the applications, reflecting the financial needs within this housing sector.

Homeowners accounted for about 14.7% of the loan applicants, indicating that even those with property ownership might have short-term cash flow needs.

Finally, around 5.9% fell into the ‘other’ category, encompassing various less common living arrangements. These percentages reveal the varied housing statuses of those applying for loans, each with its unique financial implications.

11. Number of Dependents

Most common number of dependants taking out loans

The data on the number of dependents for loan applicants shows a clear trend towards individuals without dependents. A significant 72.1% of applicants had no dependents, highlighting a predominant group of loan seekers who may have fewer familial financial obligations.

Those with one dependent represented about 14.7% of the total applications, indicating a considerable number of borrowers with single-child families or a single dependent.

Applicants with two dependents made up approximately 7.4%, suggesting a smaller yet notable proportion of borrowers supporting a slightly larger family unit.

The remainder of the applicants, accounting for approximately 5.8%, had three, four, or five dependents. This data illustrates the diverse family structures of those seeking financial assistance, with a notable majority having no dependents.

12. Loan Duration Months

Most common loan durations for same day loans

The analysis of loan duration preferences among applicants reveals some insightful trends in borrowing behavior. The most popular choice was a 3-month repayment period, with approximately 29.4% of the applicants selecting this option. This preference underscores a clear inclination towards short-term loans that offer a balance between speedy repayment and manageable instalments.

Interestingly, loan durations of 36 months were chosen by around 9.4% of the applicants, which is more than triple the number of those who opted for a 1-month period (approximately 3.2%). This pattern suggests a significant shift in borrower preferences from traditional payday loans, typically characterised by repayment periods of less than a month, towards more extended short-term loans.

Final Thoughts

From our survey of 34,000 loan applications in 2023, we found that the most common stereotype of a consumer seeking a short-term payday loan is a single, 28-32 year old, working full-time, earning £1,500 to £1,999 per month, likely in the Health or NHS sector. They typically reside in Lancashire, are renting their home, have no dependents, and are most often seeking a £100 to £599 loan over 3 months for emergency cash purposes.

This profile represents the most common answers of our applicants.

This is My Quick Loan data, taken from 2023.

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Warning: Late repayment of payday loans can cause you serious money problems. For help, go to moneyhelper.org.uk.

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