Importance of Subjective Financial Knowledge and Perceived Credit Score in Payday Loan Use
This study examined the factors associated with consumers’ decisions to use payday loans. Using a sample of 24,201 respondents from the 2015 National Financial Capability Study (NFCS), structural equation modeling was used to analyze the relationships among the variables. The results indic...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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MDPI AG
2019-09-01
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| Series: | International Journal of Financial Studies |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2227-7072/7/3/53 |
| _version_ | 1828867830043377664 |
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| author | Jae Min Lee Narang Park Wookjae Heo |
| author_facet | Jae Min Lee Narang Park Wookjae Heo |
| author_sort | Jae Min Lee |
| collection | DOAJ |
| description | This study examined the factors associated with consumers’ decisions to use payday loans. Using a sample of 24,201 respondents from the 2015 National Financial Capability Study (NFCS), structural equation modeling was used to analyze the relationships among the variables. The results indicated that payday loan use was associated with a series of consumers’ socio-psychological factors, including financial knowledge, perceived credit score, credit-card payment problems, and having emergency funds. The findings suggested that, to improve borrowing decisions and industry practices, discussions about consumers’ payday loan use and its underlying repayment problems should encompass policy intervention and institutional attention, rather than focusing on behavioral modification at the individual level alone. |
| first_indexed | 2024-12-13T05:19:21Z |
| format | Article |
| id | doaj.art-38d6361693c34c229b5074e1af61043f |
| institution | Directory Open Access Journal |
| issn | 2227-7072 |
| language | English |
| last_indexed | 2024-12-13T05:19:21Z |
| publishDate | 2019-09-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | International Journal of Financial Studies |
| spelling | doaj.art-38d6361693c34c229b5074e1af61043f2022-12-21T23:58:22ZengMDPI AGInternational Journal of Financial Studies2227-70722019-09-01735310.3390/ijfs7030053ijfs7030053Importance of Subjective Financial Knowledge and Perceived Credit Score in Payday Loan UseJae Min Lee0Narang Park1Wookjae Heo2Department of Family Consumer Science, Minnesota State University, Mankato, 102 Wiecking Center, Mankato, MN 56001, USADepartment of Financial Planning, Housing, and Consumer Economics, University of Georgia, 205 Dawson Hall, 305 Sanford Drive, Athens, GA 30602, USADepartment of Consumer Sciences, South Dakota State University, SWG 149, Box 2275A, Brookings, SD 57007, USAThis study examined the factors associated with consumers’ decisions to use payday loans. Using a sample of 24,201 respondents from the 2015 National Financial Capability Study (NFCS), structural equation modeling was used to analyze the relationships among the variables. The results indicated that payday loan use was associated with a series of consumers’ socio-psychological factors, including financial knowledge, perceived credit score, credit-card payment problems, and having emergency funds. The findings suggested that, to improve borrowing decisions and industry practices, discussions about consumers’ payday loan use and its underlying repayment problems should encompass policy intervention and institutional attention, rather than focusing on behavioral modification at the individual level alone.https://www.mdpi.com/2227-7072/7/3/53payday loanfinancial knowledgeNational Financial Capability Studystructural equation modeling |
| spellingShingle | Jae Min Lee Narang Park Wookjae Heo Importance of Subjective Financial Knowledge and Perceived Credit Score in Payday Loan Use International Journal of Financial Studies payday loan financial knowledge National Financial Capability Study structural equation modeling |
| title | Importance of Subjective Financial Knowledge and Perceived Credit Score in Payday Loan Use |
| title_full | Importance of Subjective Financial Knowledge and Perceived Credit Score in Payday Loan Use |
| title_fullStr | Importance of Subjective Financial Knowledge and Perceived Credit Score in Payday Loan Use |
| title_full_unstemmed | Importance of Subjective Financial Knowledge and Perceived Credit Score in Payday Loan Use |
| title_short | Importance of Subjective Financial Knowledge and Perceived Credit Score in Payday Loan Use |
| title_sort | importance of subjective financial knowledge and perceived credit score in payday loan use |
| topic | payday loan financial knowledge National Financial Capability Study structural equation modeling |
| url | https://www.mdpi.com/2227-7072/7/3/53 |
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