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30 Jul 2019 – Insights

New findings: Young men are the biggest users of payday loans

New numbers show, that 63 % of payday loans among young people between the ages of 18 and 29 are taken out by men - and according to private economist in Danske Bank, Louise Aggerstrøm Hansen, that can be the beginning of a downward financial spiral. That is one of the reasons why financial confidence is of the cornerstones in the bank's societal impact strategy.

At Danske Bank, Emil Toft Hansen from Copenhagen University is currently writing his business PhD thesis on lending habits of citizens living in Denmark. In connection with this, he has charted payday loan use among around 20,000 Danske Bank customers. His findings show that 40% of all payday loans are taken out by young people between the ages of 18 and 29, and in two out of three cases the young borrower is a man.   





According to Louise Aggerstrøm, private economist at Danske Bank, the fact that so many young people are taking out high-interest payday loans is a problem: 

“Taking out a payday loan – and in particular taking out several payday loans – can be the beginning of a downward financial spiral. Even if it’s only a matter of modest loans taken out to finance gaming, a new mobile phone, a night out or similar, it’s easy for you to end up paying back a great deal more because the interest rate is high. So a small loan intended to meet an acute need here and now can for many end up being difficult to pay off. And in the worst cases, these young people take out a new payday loan to pay of their existing loan, so the whole thing begins to snowball.” 

% of payday loans taken out split into age and gender  



According to the findings of the study, young people on average take out more than seven different payday loans, with the amount of each loan averaging DKK 2,000. This average is, however, skewed significantly by a small group of young people who are very active payday borrowers – a group that in 2018 took out an average of 25 payday loans with an average total value of DKK 70,000.

Better financial understanding
At Danske Bank, we work constantly to increase financial understanding among children and young people – with the specific aim of helping them to avoid falling into the payday-loan trap. We frequently visit educational institutions across Denmark to tell young people everything they will need to know about when they take over responsibility for their own money.



As well as participating in the annual Money Week programme, our advisers are out teaching in Danish schools and colleges throughout the year. It makes all the difference that we have already talked to these young people about personal finances and taught them about what lending money is all about and how to manage their finances,” explains Dorte Eckhoff, head of Danske Bank’s CSR programmes for children and young people.

Dorthe Eckhoff

Head of Danske Bank's CSR programmes for children and young people