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FactorTrust says underbanked millennials make less, borrow less

Friday, December 19, 2014 — 19:41:37 (EST)

Atlanta, Dec. 16, 2014 -- Millennials (age cohort 18-33) are now the largest and most diverse generation in the U.S. population, and account for 33 percent of FactorTrust’s database of underbanked consumers. In an attempt to shed light on underbanked Millennials, FactorTrust, the leading provider of underbanked consumer data, analytics and risk scoring solutions, today released the FactorTrust Underbanked Index: Millennial Edition. Key findings from the index show that while Millennials are slightly less economically stable and earn less money than Generation X consumers, they typically borrow less money per loan than Gen X-ers, as well.

This tendency to borrow less could be due in part to the student loan debt many Millennials face. In 2012, college graduates faced an average debt of $29,400 upon graduation, according to The Project on Student Debt. Additionally, 63 percent of Millennials do not own a credit card. Lack of credit and age could also contribute to this generation’s average loan amount.

“There is a great deal of opportunity surrounding alternative lending options for Millennials, as studies show they are less loyal to financial institutions than previous generations,” says Greg Rable, FactorTrust CEO. “This also means competition for these consumers’ business is fierce, making understanding this generation’s loan behaviors and economic stability all the more important.”

Key findings outlined in the Millennial Edition of the FactorTrust Underbanked Index offer insight on:

• Stability

• Average Monthly Income

• Average Loan Amount

An infographic that depicts the data can be viewed at ws.factortrust.com/underbankedindex/.

Key information from the Millennial Edition includes:

1. Stability – In a side-by-side comparison, Millennials are nearly as stable as Gen X-ers. These borrowers move more often, but they change employers at a rate of three percentage points lower than Gen X-ers.

a. 23.89 percent of Millennial borrowers changed phone numbers in the span of six months to a year, compared to 23.07 percent of Generation X borrowers.

b. 29.38 percent of Millennial borrowers changed bank accounts in the span of six months to a year, compared to 28.31 percent of Generation X borrowers.

c. 14.25 percent of Millennial borrowers changed addresses in the span of six months to a year, compared to 12.53 percent of Generation X borrowers.

d. 39.45 percent of Millennial borrowers changed employers in the span of six months to a year, compared to 42.30 percent of Generation X borrowers.

2. Average Monthly Income – Millennials make about $800 less per month on average than Gen X-ers.

a. The average monthly income of Millennial borrowers was $2,450 in 2013, and $2,351 in 2014.*

b. The average monthly income of Generation X borrowers was $3,315 in 2013, and $3,108 in 2014.*

3. Average Loan Amount – Though Millennials make less than Gen-Xers, they also borrow less - about $120 less per loan.

a. Millennials in the FactorTrust database borrowed $467 per loan on average in 2013 and $475 on average in 2014.*

b. Generation X consumers borrowed on average $566 per loan in 2013 and $615 in 2014.*

A copy of the Loan Behavior edition, as well as past issues of The FactorTrust Underbanked Index, can be viewed at: ws.FactorTrust.com/UnderbankedIndex. To receive the quarterly Index automatically via email, sign up at ws.FactorTrust.com/UnderbankedIndex, or simply contact media@FactorTrust.com.

About The FactorTrust Underbanked Index

The FactorTrust Underbanked Index provides a range of data points including demographic, loan behavior, seasonal effects and others, to help shed light on underbanked consumers. The Index assists financial institutions, associations, analysts and media interested in tracking, benchmarking or understanding the needs of underbanked consumers. Data is based on expert analysis from FactorTrust’s database of millions of records related to underbanked consumers collected by the company each quarter. For more information, please visit ws.FactorTrust.com/UnderbankedIndex.

About FactorTrust

FactorTrust has compiled the most comprehensive data on the underbanked market in the industry through lending portfolios that report data daily, in real time. This daily loan performance data on millions of underbanked consumers is analyzed and combined with leading third-party data attributes in order to provide instant lending decisions using the company’s comprehensive scoring platform. For more information, please visit www.factortrust.com or contact FactorTrust at 1-866-910-8494.

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Source: Company press release.