Analysis discovers no unfavorable relationship between consistent refinancing and credit scores KENNESAW, GaвЂ¦
Analysis discovers no adverse relationship between repeated refinancing and credit ratings
KENNESAW, Ga. (Dec. 9, 2014) вЂ“ a brand new research conducted by a Kennesaw State University teacher casts question regarding the claims of pay day loan critics that extended refinancing of the loans is damaging to customersвЂ™ economic welfare.
The analysis, that was commissioned by the credit rating analysis Foundation and on the basis of the transactions of 37,000 borrowers over a period that is four-year additionally unearthed that borrowers who are now living in states with less refinancing restrictions fare a lot better than those much more heavily regulated states.
вЂњWe have, when it comes to time that is first real systematic information from the results from various rollover patterns to share with a significant policy issue,вЂќ said Jennifer L. Priestley, teacher of used statistics and data technology in Kennesaw State UniversityвЂ™s university of Science and Mathematics, and writer of the research. вЂњOur research fills a gap within the technology of exactly how customers respond to protracted usage of payday loans. All prior regulatory interventions was in fact on the basis of the presumption of damage, maybe not actual proof; and we also are in possession of genuine evidence that contradicts those views.вЂќ
Key findings through the report consist of:
Borrowers whom involved in protracted refinancing (вЂњrolloverвЂќ) task had better economic results (measured by alterations in credit ratings) than customers whoever borrowing had been limited by reduced periods.