Pew's Safe Small-Dollar Loans Research Project focuses on small-dollar credit products such as payday and automobile title loans, as well as emerging alternatives. The project works to find safe and transparent solutions to meet consumers’ immediate financial needs.
Why Safe Small-Dollar Loans Matter
Millions of American families spend billions of dollars taking out payday loans each year. These loans typically offer about two weeks of credit, but at annual interest rates around 400 percent. There is little research about how small credit can most help consumers without creating a cycle of high-cost debt.
How We Conduct Our Work
Pew's Safe Small-Dollar Loans Research Project seeks to identify and analyze borrowers’ needs, expectations, and experiences when it comes to small-dollar credit. It also researches a variety of loan products and the business models used by their providers, with a focus on studying the impact on borrowers.
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The LATEST from the Project
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April 16, 2013
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. more
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- Infographic
- Safe Small-Dollar Loans Research Project
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. more
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- Media Coverage
- Safe Small-Dollar Loans Research Project
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. more
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- Media Coverage
- Safe Small-Dollar Loans Research Project
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. more
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- Media Coverage
- Safe Small-Dollar Loans Research Project
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? more
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- Media Coverage
- Safe Small-Dollar Loans Research Project
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. more
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- Media Coverage
- Safe Small-Dollar Loans Research Project
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. more
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- Media Coverage
- Safe Small-Dollar Loans Research Project
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. more
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- Media Coverage
- Safe Small-Dollar Loans Research Project
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. more
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February 20, 2013
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.
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