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The ease of approvals, which come in minutes after credit checks designed not to affect a borrower’s credit score, have appealed to borrowers and helped fuel growth. The availability of the new loan opportunity has led shoppers to buy things they might have otherwise avoided, according to a recent study from the National Bureau of Economic Research.
“The fact that large transactions are broken up makes it slightly more palatable, but it’s possible it also incentivizes people to spend more than they would have,” said Tinsley. “There’s a risk that some people who use it might get into financial stress.”
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