An Examination of Short-Term Borrowing in the United States

Global Journal of Business Research, Vol. 3, No. 2, pp. 1-8, 2009

Posted: 1 Jul 2010 Last revised: 20 Feb 2012

See all articles by Swarn Chatterjee

Swarn Chatterjee

University of Georgia

Joseph W. Goetz

University of Georgia

Lance Palmer

University of Georgia

Date Written: 2009

Abstract

This paper uses data from the Survey of Consumer Finances to determine the characteristics of people who obtained high-interest loans to meet their short-term financing needs. Results indicate that individuals who were denied credit in the past were one and a half times more likely to borrow from alternative lenders (e.g., payday loan lenders and loan financing companies) than were individuals who had not previously been denied credit. Educational attainment, income, and wealth were negatively associated with borrowing from alternative institutions. The likelihood that, given the current economic downturn, more consumers may have to migrate from conventional credit markets such as banks or credit unions to alternative credit markets for their borrowing needs leads to a discussion of the necessity for more information and education to vulnerable populations.

Keywords: Household Finance, Debt Management, Alternative Lending

JEL Classification: D14, H31

Suggested Citation

Chatterjee, Swarn and Goetz, Joseph W. and Palmer, Lance, An Examination of Short-Term Borrowing in the United States (2009). Global Journal of Business Research, Vol. 3, No. 2, pp. 1-8, 2009. Available at SSRN: https://ssrn.com/abstract=1628791

Swarn Chatterjee (Contact Author)

University of Georgia ( email )

Athens, GA 30602-3622
United States

Joseph W. Goetz

University of Georgia ( email )

Athens, GA 30602-6254
United States

Lance Palmer

University of Georgia ( email )

United States

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