This site is now an "Amazon Associate", we earn from qualifying purchases.

Features of PDL market in the USA


1,015 BEST Bail Bonds IMAGES, STOCK PHOTOS & VECTORS | Adobe Stock

Payday loan offices began to spread across the USA in the 1980s and soon became a common thing. There were nearly 15000 such offices in 2017. As a comparison, at that time there were only 14000 McDonald’s restaurants across the country.  And in the 1990s there was another growth in the development of this industry when the advent of the Internet provided the opportunity to apply for loans remotely from home.

PDLs usually charge a certain interest or cash equivalent for every $100 borrowed. This fee amount varies from $10 to $30 for every $100 borrowed. This amount depends on the law of each state and usually, it is $15 for every $100. In this case, the annual interest rate for PDL with a two-week term is equal to 400%. Then, for example, if the customer wants to borrow $300, it will cost him $345.

20 million Americans use payday lending services every year. Although this service is being marketed as a tool to cover contingencies, 7 out of 10 borrowers in the United States use payday loans to cover basic expenses such as rent and utility bills. This is not surprising, because 61% of borrowers in the United States have difficulty paying monthly expenses.

Payday loans satisfy the needs of many people, especially those who have no access to traditional loans or consumers with low credit scores. According to experts, in 2019 6.5% of American families (8.4 million) had no bank account, while 18.7% (24.2 million) made full use of banking services. It means that they had a bank account but they preferred to use alternative financial services, such as PDLs. Consumers with a low credit score are often unable to get traditional loans so they turn to alternative lenders.

Features of British PDL market

The UK is the second-largest PDL market in the world after the United States. In 2019, approximately 15% of adults in the UK (more than 9 million people) applied for such loans. More than 18 million applications for 3.2 million people were approved. The total volume of the microcredit industry in the UK is £3.7 billion per year and the annual interest rate is 500% on average.
The major part of PDL activities take place online (or through mobile phone applications). This allows borrowers to take out loans within a few minutes, usually through automated decision-making systems.
This is the main difference with the US market. The British market is dominated by online lending, which is significantly more profitable compared to common lending through offices. Online lenders can access borrowers’ bank accounts remotely.
This contrasts with the United States, where lenders are usually staff members who visit branches of banks or other financial institutions and formalize their requests in person. It involves higher expenses.

The active shift of the British PDL market to the Internet has led to the rise of so-called Third-Party Agents. These third parties are involved in the cash flow process and provide financial support for loans from microcredit organizations, claiming a percentage of their profit. These platforms often provide creditors with better terms than traditional banks. Therefore, more and more representatives of the PDL industry apply for funding to these advanced organizations.

One of the pioneers of this kind of activity is the London IT company named Hoffman-Graham. They were among the first to realize the profitability of this area and developed software that allowed them to receive and process funding applications from microcredit organizations around the world, assess their reliability by a number of indicators, and screen out those that could not reach the required trust level. The approved applications are financed by the company’s budget fund that is formed from money deposits of the users of this platform. The profit from such transactions is shared between the platform and its users. Therefore, anyone has the possibility to fund PDL organizations and not vice versa.

Due to the financial literacy of the population, as well as the use of modern technological solutions, the UK is one of the first countries that implement innovative approaches to the PDL market. This is why despite the smaller volume and demand for the PDL market in comparison with the United States, Great Britain ranks first in the world in terms of the level of development of this industry.

PDLs provide an opportunity to quickly receive funds. Usually, the transfer occurs instantaneously or at least within 24 hours of the loan application. They are convenient and for many consumers, they are the only available source of credit. Their widespread use, the trend towards further rapid growth in the popularity of this area, and the growing interest from third parties show that the volume of this market will only increase in the future.

The pandemic had a positive impact on the PDL industry and the value of the world PDL market increased by 18% in 2020. This is related to the active development of this field in African and Asian countries and the global economic recession.
At this stage, there is a dramatic overall increase in the use of scoring systems. These systems are used to rank clients who want to take out a loan. Also, along with the global growth of the PDL industry, there is a tendency for private companies to enter this market. These companies provide various lending services directly to private entities.
We believe that PDL is an extremely interesting and promising area and we will follow its further development since it is quite possible that in the nearest future the PDL market will be able to become a serious competitor to the traditional banking system.

Smart Investing Decisions

There is no doubt about it. Investing is smart. You are able to plan ahead for your future when you invest wisely. The stock market can be a bit volatile at times, but when you invest young and when you invest smart, you are able to gain quite a bit more than you will lose. […]

Continue reading...

How Does Cloud Storage Work?

Technophobes appreciate huge backup storage for all their files that most of them depend on hard drives. However, there is a possibility to lose everything in just a snap unlike with cloud storage that offers better security. It might be more expensive but actually a good investment especially for IT experts and businesses.  With Backblaze, […]

Continue reading...

Growth Guide - 5 Good Reasons To Add Commercial Real Estate To Your Investment Portfolio

Businesses are started every day, and most of them need a physical base of operations. Entrepreneurs need office space, and even online retailers need a warehouse for their goods. When you invest in commercial real estate, you’re putting yourself on the right path for a flourishing financial future. Read on to find out more about […]

Continue reading...

Closing Payoneer Account Soon - Thank God For Transferwire

Payoneer is THE WORST payment service EVER! Constant problems, constant unnecessary stalls in payment. Constant unnecessary "verifications". Payoneer acts like they are doing you a favor, instead of behaving like a REAL business. I've used Paypal for YEARS and they don't make customers jump through so many silly hoops, just to recieve YOUR PAYMENT on your ALREADY VERIFIED […]

Continue reading...

How to Find A Best Financial Planner In Boise, Idaho?

As consumers of financial services, we have a range of professionals to choose from to help us to manage our money. They are the right people to assist us to make investments, and put us on the best track to financial health and independence. Experts in this field include financial advisors, financial planners, investment advisors, […]

Continue reading...

Things to Know About Business Intelligence Reports

To know more about something, you need to understand its features and functions. The data in this article aims to shed light on BI reporting and its significance in the industry. Below are significant features of Business Intelligence (BI) reports that you should comprehend. Reporting When dealing with BI, reporting is the significant element that […]

Continue reading...

Why Groups Prefer Private Escape Rooms Like Escape Hour

Since they allow people to become part of their own reality show, escape games have become extremely popular in Canada and North America in the last eight years. Like other cities in Canada, there are a large number of escape rooms in Edmonton & Calgary, some of the largest cities in Alberta province. While in […]

Continue reading...

3 Money Management Tips for Day Trading

Trading is a market in which you can earn money. But if you make any mistakes, you will lose money instantly. It is a market where you will always lose some money and it is quite natural to do so. In a place like the trading market, losing money is quite natural. When you make […]

Continue reading...

When To Send Collectors a Cease and Desist Letter

You’re getting phone calls at all hours of the day and night. You’re being harassed at work and you’re being verbally abused — as well as threatened — all in an attempt to collect upon a debt. Why you owe the debt is irrelevant at this point. The agency trying to collect the money is […]

Continue reading...

Printing Industry: 5 Stocks are leading the Market

The global ink market reached a value of US $20.3 million. Ink plays a vital role in most expectations of human life for around centuries. It can be in the form of liquid or a paste and is primarily produced from materials like solvents, dyes, pigments, resins, lubricants, solubilizers, fluorescents, and surfactants. Over the past […]

Continue reading...

How to Successfully Market Your Small Business

Small businesses have to market their businesses successfully to remain profitable. The manner in which small businesses conduct their marketing is different from large conglomerates. Considering the limitations of a small business, there are certain elements to successfully market it. If you want to successfully market your small business you should do the following. Set […]

Continue reading...

Understanding Various Options Available for Home Loan

While investing on a new home, you will need to avail certain home loan, as the amount can be quite large. There will be plenty of lenders in the market and all of them may have different terms and conditions for offering the loan.  There are various home loan options available like adjustable rates, fixed […]

Continue reading...

How Credit Affects Home Loans

When it comes to getting a home loan, you want to be sure that you have the highest possible credit score that you can get. Credit scores have a major impact on your ability to get a home loan. Your credit history does not have to be perfect to get a home loan because homes […]

Continue reading...

POWERS Provide a Consultant’s View on the Merits of Microlending

Microlending or peer-to-peer lending can be an important tool in today’s challenging economic environment. Microloans are accessible when other forms of credit are not. The POWERS consulting firm explains how microlenders like Mintos can help small and emerging businesses around the world with their financial needs. How Microlending WorksThe main advantage of microlending or peer-to-peer […]

Continue reading...

Protecting Your Finances in Times of Crisis

If you haven’t thought about it before, there’s no time like the present to consider how to protect your finances during times of crisis. If you’ve just been going along living in the moment and trusting that everything is going to be fine, you’re not alone. Many Americans don’t realize they’ve made investments with the […]

Continue reading...

Can You Get out of Debt with Peer to Peer Loans?

Debt, especially high-interest debt from credit cards, might sometimes seem impossible to pay off.  You can try getting out of high-interest debt by throwing as much money as possible at your bills, and that might eventually work, but it’ll cost a lot of time and money, and it might not be the best way to […]

Continue reading...

Kevin Neal: The Key Differences Between Equity and Debt Capital

Running a business usually requires a significant amount of capital. Capital takes various forms, from economic capital to human and labour capital. The term ‘financial capital’ is usually associated with money. Financial capital is often represented by cash, assets and securities. Cash in the bank can make all the difference to the future of any […]

Continue reading...

Should You Apply for Bail Bond Loans

Bail bond loans can come in handy during emergencies and when arrested for committing a criminal offense. They typically range from $500 to $35, 000 and are repaid like other types of loans, typically in monthly or bi-monthly installments over a specified period of time. While they are often used to bail a loved one […]

Continue reading...

Benefits of Investing in Workflow Automation

No matter the industry, every business can benefit from routinely assessing workflow and identifying where adjustments can be made. Whether you have a small local business or if you're part of a large corporation, there is almost always room for improvement. One of the top tools that businesses can use to streamline processes is workflow automation. […]

Continue reading...

Silly Season Survival Guide - 5 Things To Try If You're Having Trouble Covering The Bills During Holiday Season

If you’re struggling to keep your head above water due to debt this Holiday season, it may not be possible to be as generous as you’d like. The good news is, you don’t have to be a big spender to show the people in your life that you love them. Follow these five tips to […]

Continue reading...
Peer to Peer Lending and Private Lending Info