Perhaps more surprising to Montezemolo, then, wasnt the high rate of default, but the timing of the defaults: among those who defaulted, nearly half did so on either their first loan (22 percent) or their second loan (26 percent). Numbers like that raise the question -- if the default rate is so high, how could the business model last. As it turns personal loan guru, default doesnt spell the end of paying the lender, or of taking out another payday loan: 66 personal loans in schenectady ny of borrowers who defaulted still wound up repaying their entire debt.
Nearly two in five (39 percent) of people who defaulted borrowed again later on. So even though a default is financially stressful for the borrower -- You dont have enough money to pay personal loans in schenectady ny back on your actual payday, Montezemolo says -- a default doesnt appear to pose as much risk to the lender.
Indeed, CFPB Director Richard Cordray, at field hearing last Thursday in Richmond, Virginia, said that many lenders rely on their "ability to collect" payments rather than on the customers' ability to repay loans, according to the bureau's research.
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