Media Coverage

CNNMoney: Americans in Love-Hate Relationship with Payday Loans

Many borrowers are in a love-hate relationship with payday lenders: they say the loans rip them off, yet the relief of quick cash leaves them coming back for more.

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Each year, nearly 12 million borrowers take out payday loans averaging $375 each. Yet, only 14% can afford to repay the $430 in principal and fees owed after two weeks, according to a Pew Charitable Trusts report based on interviews with more than 700 borrowers.

Instead, many borrowers find the $55 fee needed to renew the loan for another two weeks to be much more affordable. For the average borrower that leads to a five-month cycle of debt where they end up owing a total of $520 in fees, plus the principal on the loan, Pew found in a separate report issued last year.

Projects:
Safe Small-Dollar Loans Research Project
States:
National
 
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Related Resources

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