The Pew Charitable Trusts - State and Consumer Initiatives about Safe Small-Dollar Loans Research Project

Payday Loans: Who Uses Them and Why?

Follow the story of Jennifer, a typical payday loan customer who takes out a cash advance and ends up borrowing from her parents to pay it back, an option she could have used initially, instead of taking out a loan.

Payday Loans Do Not Eliminate Checking Account Overdrafts

Payday lenders often advertise their loans as a way to avoid expensive checking account overdrafts. Research shows most borrowers end up paying fees for both.

Payday Loans Explained

Twelve million Americans take out payday loans every year, but there are still misconceptions about how they are actually used. Follow the story of Jennifer, a typical payday loan customer, who takes out a cash advance on her paycheck to make ends meet, but ends up paying more than $500 in fees.

Akron Beacon Journal: Convenient Trap

The Pew Charitable Trusts issued a report on payday-loan borrowers in February that said: “The choice to use payday loans is largely driven by unrealistic expectations and by desperation. Borrowers perceive the loans to be a reasonable short-term choice but express surprise and frustration at how long it takes to pay them back.”

Philadelphia Inquirer: CFPB: Payday Loans Leading to 'Revolving Door of Debt'

Short-term "payday" loans, and similar "deposit advance" loans offered by major banks, are trapping many consumers in a "revolving door of debt," according to a study due by the Consumer Financial Protection Bureau. The CFPB's study echoes findings in a February report by the Pew Charitable Trusts' Safe Small Dollar Loans Research Project.

Los Angeles Times: Bill Would Limit Number of Payday Loans to Any One Borrower

A bill before the California Legislature would restrict the number of payday loans to any one borrower — an attempt to break the "debt cycle" that ensnares some of the state's poorest residents.

Sacramento Bee: Editorial: An Incremental Step to Stem Payday Loans

Sacramento Bee edititorial: California's $3.3 billion payday lending industry preys on the poor and the financially unsophisticated. Attempts to rein it in have failed. California remains among the most permissive states when it comes to payday lending.

Infographic: Payday Loans and Tax Time

How do payday loan borrowers use their tax refund? Pew has shown that payday loans are used for long term expenses instead of emergencies, and that many payday borrowers end up paying off their balances with a cash windfall.

National Journal: The Online Lenders That Could Break the Payday Loan Racket

A cohort of startups like Spotloan, LendUp, and FairLoan think they can provide people living paycheck-to-paycheck with a better source of credit. And they’re processing reams of personal data to identify reliable borrowers and create loan structures that they hope can guide people living on the financial margins into the financial mainstream.

Washington Post: Big Banks Engaging in Payday Lending, Report Says

Some of the nation’s largest banks are providing short-term loans with interest rates of up to 300 percent, driving borrowers into a cycle of debt, according to a new report from the Center for Responsible Lending.

USA Today: Payday Loans Can Get Out of Control

The real question is, can [borrowers] actually afford to repay the payday loans? Come up with $300 or $500 in just two weeks? Or even in a month?

Marketplace: Payday Lenders Need to Be More Transparent

Every year, 12 million Americans take out high-interest, short-term payday loans. The industry likes to claim it's offering a needed service and helping people who can't get credit anywhere else.

The Charlotte Post: Survey Reveals Payday Loan Demographics

A national study on the $7.4 billion payday lending industry could provide a glimpse at the implications for North Carolina consumers should a bill become law.

New York Times: Dimon Pledges to Change JPMorgan's Practices on Payday Loans

According to a report released this month by the Pew Charitable Trusts, an estimated 27 percent of payday loan borrowers say the loans caused them to overdraw their accounts.

New York Times: Major Banks Aid in Payday Loans Banned by States

Major banks have quickly become behind-the-scenes allies of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent.

How Borrowers Choose and Repay Payday Loans

This report—the second in Pew’s Payday Lending in America series—answers questions about why borrowers choose payday loans, how they ultimately repay the loans, and how they feel about their experiences.

Payday Lending in America

This collection presents original research findings from the Pew Safe Small Dollar Loans Research Project on the existing landscape for payday lending around the country, state by state data on loan regulation, and other information critical to creating a safe and transparent marketplace for those who borrow small sums of money.

Pew Survey: Payday Loans Fail to Work As Advertised

A new report from The Pew Charitable Trusts, Payday Lending in America: How Borrowers Choose and Repay Payday Loans, sheds light on the decision 12 million Americans make every year to use a payday loan.

How Payday Loans Work

Each year, millions of people struggle to pay their bills. A consumer usually has several options to consider.

Payday Loan Affordability Fast Facts

Learn more about payday loans.

Marketplace: Payday Lenders Inspire Mixed Feelings From Borrowers

Payday loans are advertised as quick fixes. But a new report from The Pew Charitable Trusts found the average borrower ends up in debt for five months.

CNNMoney: Americans in Love-Hate Relationship with Payday Loans

(Borrowers) say the loans rip them off, yet the relief of quick cash leaves them coming back for more.

Cleveland Plain Dealer: New Study Finds Most Payday Borrowers Can't Repay Loans

A staggering 86 percent of payday loan customers can't afford to repay their loans from their monthly household budgets, according to a new study from Pew Charitable Trusts.

Seattle Times: Op-ed: Payday-lending Law Works in Washington State

THE Washington Legislature is the subject of more than its fair share of criticism, but we should recognize that it passes laws that protect the public and save us money.

Payday Loans Really Add Up

If you took out a loan for the following season expenses, you would pay far more and be indebted far longer than advertised.

Paying for the Holidays

As the holiday shopping season takes off, consumers are turning to a variety of financial management tools. View our slideshow and learn more about Pew’s research on hidden bank fees, the growing use of prepaid debit cards, and the actual duration of payday loans that are marketed as two-week products.

BET News: The Truth About Payday Loans

Many Americans are increasingly turning to high interest, short term loans to try to make ends meet, but a brief overview of payday lending’s problematic setup shows that it’s often a false solution to a false problem.

TheStreet.com: Women More Likely to Take Payday Loans

Payday loans are the financial bastion of last resort for consumers barely living paycheck-to-paycheck— the last stop between buying the groceries or going hungry for way too many U.S families.

Editorial: Pa. Lawmakers Should Lose Interest in Payday Loans

LOVE AND MONEY make people crazy. Love of money makes them even crazier, especially if they are lawmakers. That must be the explanation for why our own state lawmakers are back at the table talking about allowing payday lenders to

Pa. Senate panel Hears Testimony About Proposed Payday Lending Law

A controversial bill that would create a friendlier environment for payday lenders to take up residence in Pennsylvania is vying for Senate action this fall.

It's a No-Brainer: Payday Lending Bill Shouldn't Be Passed in Senate

“Payday loans are sold as two-week credit products that provide fast cash, but borrowers are actually indebted for an average of five months per year,” concludes a Pew research report.

Data Detail Payday Loan Costs

State regulatory data show that low-income borrowers who use payday loans take out an average of eight payday loans a year, which costs them about $520 annually in interest on those loans that average $375 each, according to a study released Wednesday by the Pew Charitable Trusts.

Wall Street Journal: Footnote to Financial Crisis: More People Shun the Bank

The Russell family of Kirkland, Wash., makes about $230,000 with Charles Russell, 43 years old, working as a systems analyst for Microsoft Corp. According to the U.S. Census Bureau, that puts them among the top 5% of American households. But their affluence might not be apparent based on the way Mr. Russell conducts his personal finances. He has no bank account, having dumped it due to irritation over fees and overdraft penalties. Instead, for more everyday transactions he uses a debit-card offered by NetSpend Holdings Inc.

Payday Lending for Pennsylvania?

According to a new report by the Pew Charitable Trusts, payday loan borrowers spend $7.4 billion annually at 20,000 storefront lenders and websites. But the report also concludes that the industry is fraught with risks for consumers.

Los Angeles Times – Raising Cap on Payday Loans Would Put Borrowers into Deeper Hole

Allies of payday lenders are urging the state Legislature again to raise the cap on the high-interest loans, enabling desperate borrowers to dig themselves into even deeper holes. It's a bad idea, and lawmakers shouldn't consider raising the current limit on lending without more meaningful consumer protections than the bill's sponsor has proposed

Florida Courier – Blacks More Likely to Use Payday Loans

Most payday borrowers use the small-dollar loans to cover ordinary living expenses instead of occasional or unexpected emergencies, according to a new research report by Pew Charitable Trusts.

Online Pew Center Study Includes Interactive Data on Payday Loans

California is among states with the least regulation of payday lending, allowing loans that if renewed repeatedly would sock borrowers with 391% annual interest rates or higher, according to a new study that classifies states as permissive, restrictive or in

Ohioans Big Users of Payday Lending

The Columbus Dispatch: About 1 in 10 Ohioans has used payday loans in the past five years, among the higher rates in the nation.

Nine States Where Lenders Take Your Paycheck

Payday loans — small, short term loans secured against a customer’s next paycheck — are highly controversial. A new study from Pew Charitable Trusts explains that opponents believe the practice “preys” on people who, because of the high interest rates

Payday Profits

The Office of the Comptroller of the Currency, which failed to control the reckless mortgage lending that helped cause the financial crisis, is widely regarded as a pushover among federal regulators. But the agency showed some welcome muscle and concern

Why to Steer Clear of Payday Loans

Payday loans are meant as a stopgap for the fiscally pinched. But in many cases, these short term loans create a costly cycle of escalating debt. A payday loan is like a cash advance on your paycheck. Marketed as a

Regulatory Comment: Proposed Rulemaking on General Purpose Reloadable Prepaid Cards

The Pew Charitable Trusts’ Financial Security Portfolio is pleased to provide comments in response to the Consumer Financial Protection Bureau’s Advanced Notice of Proposed Rulemaking on General Purpose Reloadable Prepaid Cards.

Market Watch: Pew: On Payday Loans, Conventional Wisdom Flawed

New research from the Pew Charitable Trust challenges some of the conventional wisdom on payday loans. Nick Bourke, director of Pew's Safe Small-Dollar Loan Research Project, tells MarketWatch Radio's Adrienne Mitchell about how they are used and what alternatives borrowers have.

Payday Loan Borrowing By State

State payday loan usage ranges from 1 to 13 percent.

Quiz: Payday Lending in America

Each year, millions of Americans borrow payday loans from storefront and online lenders. Do you know who borrows, where they borrow, and why? Take our interactive quiz to learn more!

Who Borrows, Where They Borrow, and Why

This report answers major questions about who borrowers are demographically; how people borrow; how much they spend; why they use payday loans; what other options they have; and whether state regulations reduce borrowing or simply drive borrowers online.

State Payday Loan Regulation and Usage Rates

Use the map to see each state’s usage rate, and click individual states to read a summary of their payday lending laws.

Nationwide Pew Survey Challenges Conventional Wisdom on Payday Loans

Americans spend $7.4 billion per year on payday loans, including an average of $520 in interest per borrower for eight $375 loans or extensions. The Pew Charitable Trusts establishes a new understanding of borrowers and their needs in Payday Lending in America: Who Borrows, Where They Borrow, and Why.

Payday Lending in America

Pew’s Safe Small-Dollar Loans Research Project surveyed payday loan borrowers about their usage, as well as other options they would use if payday loans were unavailable.

A Short History of Payday Lending Law

A hundred years ago, when a mass market for consumer credit did not yet exist, underground purveyors of consumer credit began to emerge, and a variety of problems ensued.