The loan that created a habit where the borrower kept coming back to request an extension is typically the payday loan. Payday loans are short-term, high-interest loans usually due on the borrower's next payday. Borrowers often find themselves unable to repay the loan on time, leading them to request extensions or take out additional loans, creating a cycle of debt

. Several reasons explain why payday loans are popular despite their tendency to trap borrowers in debt cycles:

• Accessibility: Payday loans require minimal documentation and have fewer credit checks, making them accessible to people with poor credit histories.
• Urgency: Borrowers often need quick cash for emergencies or unexpected expenses, and payday loans provide immediate relief.
• Marketing: Payday lenders target vulnerable populations by emphasizing convenience and speed, downplaying long-term costs.
• Lack of financial literacy: Many borrowers underestimate the total cost and implications of rolling over loans.
• Normalization of borrowing: Some borrowers come to rely on payday loans as a regular financial strategy rather than seeking alternatives

In summary, payday loans create a habit of repeated borrowing and extensions due to their structure and the urgent financial needs they address, despite the risk of perpetuating debt cycles