ACORN Canada study finds an increase in the use of installment loans and a growth in high-interest online loans

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TORONTO, February 17, 2021 (GLOBE NEWSWIRE) – On Wednesday, February 17, ACORN will host events in nine cities across the country that will publish the results of a nationwide survey and a report on consumer experience with high-interest loans (Interest Rate Loans from 25% – over 500%), especially for online degrees. The study results are based on 376 survey responses.

We also ran a law scan to determine how well consumers are protected from high-yield credit at the federal and state levels.

The recommendations of the study call on the federal government to commission banks Develop a national multi-jurisdiction anti-robbery credit strategy to protect low-income and other vulnerable consumers from predatory lending practices and improve their access to fair banking options. ACORN has been fighting for fair banking at the national, provincial and local levels for more than a decade.

You can find a detailed report here. The link will be activated on February 17, 2021.
https://acorncanada.org/resource/national-report-high-interest-loans

Pour le français, cliquez ici https://acorncanada.org/resource/etude-sur-les-prets-a-interet-eleve

Contact information:
Judy Duncan – 416 996 6401 – [email protected]
Bhumika Jamb – 647 913 5358 – [email protected]

ACORN members will publish the report on February 17, 2021.

LOCAL ACTION

The main highlights of the ACORN Canada 2020 report:

  • 70% of respondents said they took out a high-interest loan.

  • While the majority of consumers, that is 70%, continue to take out payday loans, there is an increase in the number of people taking out installment loans. In 2016, the proportion of installment borrowers was 11% increased to 45% in the latest study.

  • Specifically, the study indicates that people either take out these loans once or all at once Vicious circle of debt. While 30% of the respondents stated that they had taken out these loans only once in the past 12 months, the second highest number of answers was for 13% of the respondents more than 10 times a year.

  • Unsurprisingly, 80% of respondents say they have taken out a loan to cover daily living expenses such as rent, groceries, hydropower, etc. they are doing.

  • 45% said they had to rush to sign the loan agreement with the lender.

  • 12% of respondents were never informed about optional products such as insurance until a large amount was debited from their account.

  • Almost 30% said they had taken out an online loan. The reasons for borrowing online were primarily because people found it convenient and quick.

  • 17% said they were unable to make payments due to COVID in a difficult financial situation. Only 7% found the lenders extremely considerate.

  • 40% turned to banks before taking out a high-yield loan. and were denied. Only 3% said they prefer a high-yield loan.

  • When it comes to online lending in particular, the study shows that the nature of the problems these loans affect when taken out of the store or online are broadly similar. However, there are certain specific issues that are unique to online lending and so it is important that any consumer protections that apply to the storefront also apply to online lending.

Background:
ACORN Canada is a National Independent Organization is an independent national organization of low and middle income families with more than 140,000 members in over 20 neighborhoods in 9 cities.

Contact information:
Judy Duncan 416 996 6401 – [email protected]
Bhumika Jamb 647 913 5358 – [email protected]



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