期刊名称：International Review of Social Sciences and Humanities
印刷版ISSN：2250-0715
电子版ISSN：2248-9010
出版年度：2012
卷号：3
期号：2
页码：214-229
出版社：International Review of Social Sciences and Humanities
摘要：Payday and car title loan operations in the United States have grown exponentially over the past two decades. Such loans are normally for small amounts with short-term maturities and generally extended to borrowers facing liquidity constraints. Some borrowers may find that they are not able to repay these loans, which draws them into a spiral of ever increasing debt. By any measure, the interest rates charged are onerous. Given the high interest rates charged and potential significant negative outcomes associated with these loans, some assume that the risk-tolerance profile of borrowers is high. Results from this research indicate that borrowers view the positive loan attributes of payday and car title loans (e.g., fast and easy) as outweighing potential risks and costs. This creates an interesting risk-tolerance paradox; namely, relying on high risk and cost loans should be an activity reserved for those with high financial risk tolerance, whereas existing evidence suggests that payday and car title loan borrowers tend to have a low financial risk-tolerance profile. This research helps address this puzzle. In this study, it was determined that the risk-tolerance of high cost borrowers was found to be lower than non-borrowers.
关键词：Payday Loans; Car Title Loans; Risk Tolerance.
