$500 Dollar Loans – the Math and the Means (Case Studies)


Introduction: Five hundred dollar loans are one of the most searched for loan amounts online, and for a few reasons:

  1. $500 is often all someone needs to borrow to fix a typical everyday emergency, and;
  2. $300 is the maximum amount of cash that most payday loan companies, and cash advance companies will lend out sight-unseen (first-time customers), when potential customers are applying online. Therefore people are using the Internet to find companies that lend as high as $500 on the first loan.
  3. People who borrow money from PDL companies generally have poor credit rating, and a lower income bracket, so they feel that they can handle paying and amount of five hundred dollars or less back without incurring any penalties, rollover fees, extra admin fees, and NSF cheque fees with their bank.

Case Study Sources (Lending Data Tables): As our frequent visitors know already here at BuckForCanucks.com we receive numerous requests for loans on a daily basis, and only a small handful of those loan requests actually get published on our website. We have parsed the data to show different patterns in lending and borrowing across Canada, particularly in the payday loan and cash advance sector of the short term, small consumer loan industries.

So what we have begun to do is look at the reasons why people borrow online using direct lenders or payday loan companies, as well as the costs they incur using these lending products, and their location in Canada.

For this case study we’re looking at $500 loans specifically and completely. As mentioned in the introduction above, $500 loans are the most common loan requests on the Internet. And this stands true in the United States as well. I won’t go into the reasons why because I have done that above already, but I will explain a little bit about what you are going to see in the data below.

You will see a loan data table that holds the information regarding the most common small consumer loan found in a particular city and area of Canada. In some tables we have included the outlying areas as well in the data collection process. Even the reason for the loans are listed being the most common reason in that area of Canada. This was a bit of a chore to code because we had no manual way of doing this considering there was over 200,000 loan requests to parse.

This is the list of data for each loan table below;

  • reason for loan
  • name of loan product (lending industry nomenclature)
  • the loan principal
  • fee per $100 borrowed by customer
  • the effective APR of the loan
  • total fees charged by the lender
  • total amount paid back to the lender
  • the length of the loan term period
  • City and/or area in Canada
  • Province in Canada were borrower lives
  • lender classification
  • average default rates
  • average FICO score
  • the speed of funding (time from application submission online to the borrower receiving the funds in their savings/chequing acct.)

Reason for Loan (Clarification): None of these loan scenarios are based on a single borrower and lender transaction. In the reason columns we are listing the most common purpose for borrowing $500 in that area and city of Canada.

We will be starting on the West Coast of Canada, and then working your way East as far as Ontario. We decided not to include some of the smaller cities and areas of Canada because we didn’t have nearly enough data to make the information compelling. So, here we go – 10 different five hundred dollar data studies from across Canada. Payday loan are not legal in Quebec at the time of this writing.

$500 Loan in Vancouver [Surrey, Burnaby], B.C., Canada

500 dollar loans case study greater vancouver 300x272 $500 Dollar Loans   the Math and the Means (Case Studies)Our first $500 loan case study is in Vancouver, British Columbia, but the actual data was taken from Burnaby, Vancouver general, Surrey, and Abbotsford. Most common reason for getting a payday loan for $500 was to pay for rent. So often the reason people use payday loans is to avoid an eviction. There is no morality on either side of this study, as this is just the raw data in regards to the purpose tracking payday loan and cash advance lending on the West Coast of Canada.

Most all of these borrowers had bad credit ratings with fico scores below 645. Most of these applicants made less than $21400 gross monthly income, and most of the approved borrowers pay back the loans on time.

By using our payday loan calculator we have also done the math on the most common fees charged by the payday loan companies. of course there was a mixture of cash advance companies and direct lenders, as well as the so-called no teletrack lenders and the no faxing lenders.

You can see that the vast majority in the Vancouver and surrounding areas pay back their loans on time and in full. You can see this in the default/charge-off rate column.

Table of Payday Loan and Cash Advances in Vancouver [Surrey, Burnaby] Area

Table date and time stamp is 2011-11-02 [15:07:37]

Loan Parameters (averaged) Value
Most Common PDL Storefronts The Cash Store/Mr. Payday/CashMoney
Loan Principal $500
Fee Per $100 $23
Effective APR 598%
Total Fees Charged $115
Total Monies Repaid $615
Loan Term/Period 8.5 days
City and Surrounding Areas Vancouver [Surrey, Burnaby]
Province/State of Borrowers British Columbia
Country of Borrowers Canada
Classification of Lenders Payday Loans
Charge-Off Rate (total default) 4.7%
Gross Income below $2230
FICO Score below 645

Update: The above data for the West Coast of Canada now includes all of Vancouver Island, including, Campbell River, Courtenay, Comox, Port Hardy, Duncan, Sydney, and Victoria.

$500 Loan in Edmonton, AB, Canada

500 dollar loans case study edmonton alberta $500 Dollar Loans   the Math and the Means (Case Studies)The are is a wide swinging range of applicants and borrowers that are in the customer pool for the payday loan companies in Edmonton. We see people applying for payday loans all the way from $5000 down to $50. All different reasons and purposes.

You will notice the $21.50 per $100 borrowed column which may seem unusual because there the typical fee charged in Alberta is $23 (the maximum by provincial law).

However, there is a couple payday loan stores going on price wars periodically causing the dip below the $23 norm. Kudos to the borrowers in Edmonton for such a low charge-off default rate.

The most recent loan request we had from Edmonton for $500 was because the borrower couldn’t make all their bills.

They didn’t have cable and they didn’t have any kind of phone service – no landline or cell phone service.

There is a steady flow of applicants that apply for PDL products in Edmonton, and the reason being that the average age in the workforce in Edmonton is fairly young. I don’t know about you but, I made my biggest financial mistakes, and had the least disposable income when I was in my twenties.

Table of Payday Loan and Cash Advances in Edmonton Area

Table date and time stamp is 2011-11-02 [15:52:00]

Loan Parameters (averaged) Value
Most Common PDL Storefronts CashMoney/The Cash Store
Loan Principal $500
Fee Per $100 $21.50
Effective APR 1118%
Total Fees Charged $107.5
Total Monies Repaid $607.5
Loan Term/Period 10 days
City and Surrounding Areas Edmonton
Province/State of Borrowers Alberta
Country of Borrowers Canada
Classification of Lenders Payday Loan/Cash Advance
Charge-Off Rate (total default) 3.9%
Gross Income below $2170
FICO Score below 612

 

$500 Loan in Calgary, AB, Canada

500 dollar loans case study calgary alberta 300x272 $500 Dollar Loans   the Math and the Means (Case Studies)Calgary (our home base at BucksForCanucks.com) also has some PDL companies that charge less than the maximum amount allowed by Alberta Provincial legislation.

The the most popular PDL companies operating in Calgary are Instaloans, The Cash Store, and there are some MoneyMart stores on their streets as well.

Higher FICO score average and a good charge-off rate as compared to many cities in North America.

The volume of PDL approvals in Calgary has grown in the last 2 years as conventional banks are becoming tighter and tighter with grants personal lines of credit.

Average fee per $100 being $22.55. The reason it’s not at the maximum $23 per $100 is unknown at this point, but we will dig deeper into the data as time goes on.

Table of Payday Loan and Cash Advances in Calgary Area

Table date and time stamp is 2011-11-02 [16:02:58]

Loan Parameters (averaged) Value
Most Common PDL Storefronts Instaloans/The Cash Store
Loan Principal $500
Fee Per $100 $22.55
Effective APR 292.5%
Total Fees Charged $112.5
Total Monies Repaid $612.5
Loan Term/Period 8 days
City and Surrounding Areas Calgary
Province/State of Borrowers Alberta
Country of Borrowers Canada
Classification of Lenders Payday Loan/Cash Advance
Charge-Off Rate (total default) 3.9%
Gross Income below $2300
FICO Score below 631

 

$500 Loan in Saskatoon, SK, Canada

Saskatoon’s average charge-off rate is the lowest in Canada at 2.9%. The standard rate is $23 dollars charged for every $100 borrowed.

Table of Payday Loan and Cash Advances in Saskatoon Area

Table date and time stamp is 2011-11-02 [19:35:13]

500 dollar loans saskatoon sk $500 Dollar Loans   the Math and the Means (Case Studies)

Loan Parameters (averaged) Value
Most Common PDL Storefronts Instaloans/The Cash Store/MoneyMart
Loan Principal $500
Fee Per $100 $23
Effective APR 390%
Total Fees Charged $115
Total Monies Repaid $615
Loan Term/Period 11 days
City and Surrounding Areas Saskatoon
Province/State of Borrowers Saskatchewan
Country of Borrowers Canada
Classification of Lenders Payday Loan/Cash Advance
Charge-Off Rate (total default) 2.9%
Gross Income below $1850
FICO Score below 605

 

$500 Loan in Regina, SK, Canada

Regina’s numbers come in similar to Saskatoon’s numbers except that the average gross income is quite low for this gaggle of borrowers.

Table of Payday Loan and Cash Advances in Regina Area

Table date and time stamp is 2011-11-02 [19:35:20]

500 dollar loans regina sk $500 Dollar Loans   the Math and the Means (Case Studies)

Loan Parameters (averaged) Value
Most Common PDL Storefronts Instaloans/The Cash Store/MoneyMart
Loan Principal $500
Fee Per $100 $23
Effective APR 390%
Total Fees Charged $115
Total Monies Repaid $615
Loan Term/Period 9 days
City and Surrounding Areas Regina
Province/State of Borrowers Saskatchewan
Country of Borrowers Canada
Classification of Lenders Payday Loans/Cash Advances
Charge-Off Rate (total default) 3.2%
Gross Income $1750
FICO Score 590

 

$500 Loan in Winnipeg, MB, Canada

Payday lenders in Winnipeg, being in Manitoba, can only charge $17 for every $100 borrowed, which really cramps their style I’m sure. So this table shows big drop in the effective APR being charged. However the APR is still coming in over 550%.

Table of Payday Loan and Cash Advances in Winnipeg Area

Table date and time stamp is 2011-11-02 [19:35:26]

500 dollar loans winnipeg mb $500 Dollar Loans   the Math and the Means (Case Studies)

Loan Parameters (averaged) Value
Most Common PDL Storefronts CashMoney/The Cash Store/MoneyMart
Loan Principal $500
Fee Per $100 $17
Effective APR 585%
Total Fees Charged $85
Total Monies Repaid $615
Loan Term/Period 12 days
City and Surrounding Areas Winnipeg
Province/State of Borrowers Manitoba
Country of Borrowers Canada
Classification of Lenders Payday Loan/Cash Advance
Charge-Off Rate (total default) 4.21%
Gross Income $1950
FICO Score 573

 

$500 Loan in Toronto [Mississauga], ON, Canada

The Ontario laws on the books for payday loans restrict lenders charging more than $21 dollars for every $100 dollars borrowed. Notice the skyrocketing APR over 1000%. This is because the loan term period was 7 days for the calculation.

Table of Payday Loan and Cash Advances in Toronto [Mississauga] Area

Table date and time stamp is 2011-11-02 [19:35:36]

500 dollar loans toronto on $500 Dollar Loans   the Math and the Means (Case Studies)

Loan Parameters (averaged) Value
Most Common PDL Storefronts Cash Store/CashMoney/CashMax
Loan Principal $500
Fee Per $100 $21
Effective APR 1092%
Total Fees Charged $105
Total Monies Repaid $605
Loan Term/Period 10.5 days
City and Surrounding Areas Toronto [Mississauga] Applicants
Province/State of Borrowers Ontario
Country of Borrowers Canada
Classification of Lenders Payday Loans/Cash Advances
Charge-Off Rate (total default) 4.4%
Gross Income $2250
FICO Score 584

 

$500 Loan in Ottawa [Gatineau], ON, Canada

Ottawa doesn’t have as much volume for payday loan approvals as some areas of Ontario, but enough to keep the PDL businesses thriving.

Table of Payday Loan and Cash Advances in Ottawa [Gatineau] Area

Table date and time stamp is 2011-11-02 [19:35:48]

500 dollar loans ottawa on $500 Dollar Loans   the Math and the Means (Case Studies)

Loan Parameters (averaged) Value
Most Common PDL Storefronts Cash Store/Cash Money/Instaloan/Mogo
Loan Principal $500
Fee Per $100 $21
Effective APR 1092%
Total Fees Charged $105
Total Monies Repaid $605
Loan Term/Period 12 days
City and Surrounding Areas Ottawa [Gatineau]
Province/State of Borrowers Ontario
Country of Borrowers Canada
Classification of Lenders Payday Loan Provider
Charge-Off Rate (total default) 5.0%
Gross Income below $2300
FICO Score below 611

 

$500 Loan in Kitchener [Cambridge, Waterloo, London], ON, Canada

A large volume of loans go through this area of Ontario. One of the highest volume areas in all of Canada.

Table of Payday Loan and Cash Advances in Kitchener [Cambridge, Waterloo, London] Area

Table date and time stamp is 2011-11-02 [19:35:54]

500 dollar loans kitchener on $500 Dollar Loans   the Math and the Means (Case Studies)

Loan Parameters (averaged) Value
Most Common PDL Storefronts Cash Money/Cash Store/Cash Shop
Loan Principal $500
Fee Per $100 $21
Effective APR 1092%
Total Fees Charged $115
Total Monies Repaid $615
Loan Term/Period 9 days
City and Surrounding Areas Kitchener [Cambridge, Waterloo, London]
Province/State of Borrowers Ontario
Country of Borrowers Canada
Classification of Lenders Payday Loans/Cash Advance
Charge-Off Rate (total default) 3.94%
Gross Income below $2343
FICO Score below 644

 

$500 Loan in Hamilton [Burlington], B.C., Canada

Low charge-off rate here.

Table of Payday Loan and Cash Advances in Hamilton [Burlington] Area

Table date and time stamp is 2011-11-02 [19:36:17]

500 dollar loans hamilton on $500 Dollar Loans   the Math and the Means (Case Studies)

Loan Parameters (averaged) Value
Most Common PDL Storefronts Cash Store/Cash Money/Instaloan
Loan Principal $500
Fee Per $100 $21
Effective APR 1092%
Total Fees Charged $115
Total Monies Repaid $615
Loan Term/Period 10 days
City and Surrounding Areas Hamilton [Burlington]
Province/State of Borrowers Ontario
Country of Borrowers Canada
Classification of Lenders Payday Loans/Cash Advances
Charge-Off Rate (total default) 3.76%
Gross Income below $2214
FICO Score below 632

This concludes our case study on $500 loans across Canada. Hope you find this data to be useful. We will be updating this when and if the data changes in the future.

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4 Loan Requests

  1. Auggie applied for the following loan:

    Loan: 500CAD

    Speed: 26 April 2012

    Credit: approx 600

    Location: Winnipeg, Manitoba

    Income: full-time employment 1800 part-time employment 1200

    Reason:

    Car repair

  2. Shanelle applied for the following loan:

    Loan: 500.00

    Speed: As soon as possible

    Credit: Not so good

    Location: Winnipeg, Manitoba, Canada

    Income: $1500.00 monthly or more

    Reason:

    Bill payments

  3. andra applied for the following loan:

    Loan: 500

    Speed: this weekend

    Credit: 490

    Location: Ontario

    Income: I make $1668 after tax

    Reason:

    Catch up on some unexpected bills

  4. Ronald applied for the following loan:

    Loan: $300

    Speed: now

    Credit: fair

    Location: muskegon,mi

    Income: $1200 social security 800 as janitor 630 taking care oif y exwife 425 rent room in my home

    Reason:

    car repairs and dental

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