Research and Statistics

Infographic: Who is using small-dollar loans and why?


Fifteen million Americans used small-dollar credit products in 2011, from outfits such as pawnshops, payday lenders and auto title outfits. Who borrows, why and what do they spend their loans on?

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

The Center for Financial Services Innovation (CFSI) conducted a study that found about 15 million consumers used at least one small-dollar credit product in the past year. A small-dollar credit product is typically a small loan that must be repaid in a short amount of time and is often used by consumers between paychecks. These products can include payday loans, pawnshop loans, direct deposit advance loans, auto title loans and nonbank installment loans.

The study included a survey of more than 1,100 consumers who had used these kinds of loans: Key factors as to who makes up this demographic are illustrated below.

According to the survey, 66 percent of small-dollar credit consumers had no savings, 59 percent had a high school education or less, and only 27 percent had a credit card. If this is a demographic that struggles with getting and establishing credit, then short-term, small-dollar loans would be appealing to them as most do not require a credit check.

The survey also asked respondents to indicate why they used a small loan, and paying utility bills was No. 1 on the list at 36 percent. Rounding out the top three were using the loan for living expenses (34 percent) and rent (18 percent). The top reasons they needed the cash in the first place? Their living expenses were consistently more than their income, they had a bill or payment due before they received their paycheck or they experienced unexpected events such as medical emergencies.

The who and why of small-dollar credit  
To use this graphic on your site, use the following code:

 <center><a href=””><img alt=”Infographic: Small-dollar credit users” border=”0″ src=”” height=”574″ width=”344″ /></a> </center>

See more infographics


Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Research and Statistics

Consumer credit card balances fall again

Consumer credit card balances fell for the second straight month in July, according to new data from the Federal Reserve

See more stories
Credit Card Rate Report Updated: May 27th, 2020
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.