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Payday loans are an option for many to get cash when they require quick, but it is not without a significant cost and can quickly create the “quicksand” result whereby the borrower takes out more loans to cover the cost of current loans. Although the demand for loans of small amounts dropped 67% during the COVID-19 lockdownperiod, the trade association OnlineLendersAlliance believes recovery to the pre-Covid levels will be a while off. Here are some facts regarding payday loans:

  • Twelve million Americans take advantage of payday loans every year.
  • In 2017 the number of payday loan locations across the US (there were only 14,027McDonalds stores).
  • The typicalpayday lender is in debt for five months of the year. Additionally, the average earnings for payday loans borrowers are $33,000 YEARLY.
  • 7 out of 10 people who apply for payday loans do so to pay for the regular recurring expenses, such as utility bills and rent, and on average, $375.
  • In the year that passes 9 billion dollars are paid out in payday loan charges which is just 14 percent of the borrowers are able to pay back their loans.
  • Paydayloans are utilized by everyone but are primarily used by Gen-Xers and Millennials. The increasing popularity of cash advance loans (Dave, Chime and Earnin) has resulted in an increase in cash advance and payday online loans applications.
  • 17 states and the District ofColumbia have banned paydaylending, or have set rates of interest.
  • A lot of paydayloans have deadlines that are only two weeks, and they come with an incredible annual rate of interest that can reach 300 percent.
  • A ConsumerFinancial ProtectionBureau report says that over eighty percent of loans for payday are converted to new loans prior to being completely paid back.
  • Monthly borrowers were significantly likely to remain in credit for 11months or more.
  • Total credit card debt outstanding for personal loans within the US is 143 billion dollars.
  • There were 21.1million personal loans outstanding across the U.S.
  • The average rate of interest for the personal loans can range from 10 percent and 28 percent.
  • Based on data collected by the TransUnion the solution is Gen X’ers who have an average balance on loans of 9,522USD.
  • On the average, people who take out payday loans have to pay $520 to take out $375.