Study Reveals Women Are More Likely to Be Denied a Loan
Inside Subprime: May 13, 2019
By Lindsay Frankel
A new study conducted with a Yale researcher revealed that financial inequality for women goes beyond the wage gap and impacts nearly every aspect of women’s financial well-being.
The survey of more than 10,000 employees across 26 industries revealed an overall wage gap—the average annual income reported for women was $58,027 when compared to $79,517 for men—but that was just one of several findings that indicate women are more financially fragile.
Women were also more likely to report that they lack emergency savings and struggle to make it from one paycheck to the next. 34 percent of women said their funds run out before payday arrives, compared to 25 percent of men, and 41 percent of women said they couldn’t cover a $500 expense, compared to 18 percent of men.
Since women are carrying more student loan debt and medical debt than men and have less money overall to manage their expenses, it’s more likely that they’ll need to borrow money, especially if an emergency arises. Yet women are also a third more likely to be denied a loan.
Facing ongoing financial stress and discrimination from lenders, it’s no surprise that women are more likely to turn to payday loans than men. Women account for about 60 percent of all payday loan borrowers, and single mothers are even more likely to take out a payday loan.
56 percent of women reported having financial stress, compared to 41 percent of men, and the effects were significant. Women were 1.3 times more likely to experience sleep deprivation and anxiety due to financial strain.
The disparities in financial wellness aren’t due to women’s spending habits—in fact, women are more frugal than men on average. 37 percent of women opt to save their money rather than spend it, while only 32 percent of men report the same. But despite their efforts, women are more worried about putting money away for retirement than men. 70 percent reported feeling like they have insufficient savings for retirement, compared to only 50 percent of men.