Marketplace: Payday Lenders Inspire Mixed Feelings From Borrowers
Generally, payday loans are advertised as quick fixes for unexpected expenses -- a couple hundred dollars to hold borrowers over until their next paycheck. But a new report from The Pew Charitable Trusts released Wednesday found the average borrower ends up in debt for five months, paying $520 in finance charges for loans of just $375.
Some borrowers spend years in debt.
Pew’s study found nearly 40 percent of payday borrowers would have taken out a loan no matter what the terms were.
Moreover, consumers have complicated relationships with these lenders, according to Nick Bourke, the director of Pew’s Safe Small Dollar Loans Research Project.