What's considered to be one of the most accurate profiles of a British pay day loan user in 2013 has been released, and it's suggesting the average customer is a man or woman aged 25-34, either living with a partner or married, and is likely to have at least one child.

Peachy.co.uk has published its research on over 2,000 people who've applied for finance. The results show the typical customer is in employment earning between 1,200 – 2,000 pounds a month, and on average, they've had more than 3 loans. Interestingly, nearly 4 in 5 would recommend a good pay day lender to their friends.

Earlier this year, the Department of Business, Innovation and Skills (BIS) commissioned research entitled 'The impact on business and consumers of a cap on the total cost of credit'(1). The research covered home credit, pawnbroking, retail payday lending (carried out in-store) and online payday lending, and drew a number of conclusions through surveying lenders and their customers, many similar to the findings from the Peachy profile.

The BIS paper highlighted how most of the short-term loan customers had repaid their debt in full by their due date; 38% of pawnbroking customers and over a quarter (26%) of retail pay day loan customers hadn't, leading them to renew their loan or take other action. For over 1 in 10 pawnbroking customers in this situation, it led to them losing the items they had pledged.

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Peachy Payday Loan Customer Profile

Founder of Peachy is Kristjan Novitski: "The research commissioned by BIS, and the profile research we're publishing starts to peel away some of the myths surrounding pay day lenders being a bunch of bad guys who target the weak and vulnerable parts of society. We're releasing our findings to paint a much more focussed picture of a typical pay day loan customer which we hope goes some way in balancing out the incredibly hard press every part of our industry gets."

According to the Peachy profile, customers are using loans to pay for unforeseen costs, other emergencies, on essentials like food and fuel, or helping them pay their regular utility bills.

The research digs deep into the lifestyle of pay day loan customers, looking at how they consume media, their lifestyle habits, education and their working lives too – with the latter showing nearly 90% of people applying for pay day loans are employed with 4% retired. According to the study 46% are married or living with someone, while 45% class themselves as single; 59% had at least one child including the 7% who had 3 or more children. And it seems the majority come back for loans; 71% have had 3 or more, over a fifth have had between 1 and 3 in their lifetime.

Novitski says that comes as no surprise: "As a responsible lender, we fully support a well regulated industry as there is clearly a need for the service we provide. But, we also have both a moral and a business responsibility to uphold; why target people who can't afford to pay money back? It makes no business sense. Our goal is respond to customers who have a need for a short term loan, and who have the means to pay it back."

Novitski also commented: "Mainstream payday lenders work within the lines of regulation and for people like us, as our research shows, we end up with customers who are happy, can pay back the money they borrow and who come back. It's great to see how 4 in every 5 of our customers would recommend a good pay day lender to a friend – that's the same figure as those who responded to the BIS research earlier in the year."

Further breakdown of the Peachy customer profile research:

GENDER

– Female 49% – Male 51%

AGE

1. 25-34 (33%)

2. 35-44 (25%)

3. 45-55 (20%)

4. 18-24 (13%)

5. 56+ (9%)

MARITAL STATUS

1. Single (45%)

2. Married (25%)

3. Living Together (21%)

4. Divorced (8%)

5. Widowed (2%)

SIBLINGS

1. No children (41%)

2. Yes, 2-3 children (33%)

3. Yes, 1 child (19%)

4. Yes, more than 3 children (7%)

MONTHLY INCOME

1. 1,200 – 2,000 (48%)

2. 600 – 1,200 (32%)

3. 2,000 or more (15%)

4. 599 or less (6%)

NUMBER OF LOANS TAKEN

1. Have taken more than 3 pay day loans in their lifetime (71%)

2. Have taken 1 – 3 pay day loans in their lifetime (22%)

3. Have taken just one pay day loan(7%)

HOW PEOPLE APPLY FOR LOANS

1. Have used computers to apply for loans (81%)

2. Have used a smartphone to do apply for loans (32%)

3. Have used a money shop to apply for a loan (7%)

4. Have called a lender to apply for a loan (3%)

WOULD THEY SUGGEST A GOOD PAY DAY LOAN LENDER TO THEIR FRIENDS

– Yes: 79%

– No: 21%

PASTIME ACTIVITIES

1. Listen to music (41%)

2. Cooking (31%)

3. Reading (31%)

4. Shopping (26%)

5. Going to the cinema (23%) 6. Surfing online (21%)

7. Outdoor Sports (20%)

8. Video gaming (15%)

9. Clubbing (12%)

10. Indoor Sports (9%)

11. Dancing (6%)

12. Photography (6%)

13. Writing (5%)

14. Handicraft(4%)

15. Drawing & Painting (4%)

16. Hiking(3%)

17. Blogging (1%)

TRAVEL

1. Travel twice a year (23%)

2. Travel once a year (22%)

3. Travel less than once a year (18%)

4. Travel more than once a month (12%)

5. Travel once in three months (7%)

6. Never travel (7%)

7. Travel more than once every three months (6%)

8. Travel once a month (4%)

DO THEY GAMBLE IN BETTING SHOPS OR ONLINE

– Yes: 30%

– No: 70%

For more information you can visit www.peachy.co.uk

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