Fast Facts--Payday Loans

  • Since its inception in the 1990s, the payday lending industry has established over 22,000 locations which originate an estimated $27 billion in annual loan volume.
  • Nationally, there are more than two payday lending storefronts for every Starbucks location.
  • The typical two-week payday loan has an annual interest rate ranging from 391 to 521 percent.
  • The“churning” of existing borrowers’ loans every two weeks accounts for three-fourths of all payday loan volume.
  • Repeated payday loans result in $3.5 billion in fees each year.
  • Loans to non-repeat borrowers account for just two percent of the payday loan volume.
  • The average payday borrower has nine transactions per year.
  • 90% of the payday lending business is generated by borrowers with five or more loans per year, and over 60% of business is generated by borrowers with 12 or more loans per year.
  • If a typical payday loan of $325 is flipped eight times, the borrower will owe $468 in interest; to fully repay the loan and principal, the borrower will need to pay $793.
  • The typical payday borrower remains in payday loan debt for 212 days of the year.
  • From 2008-2010, voters in three states have said ‘NO’ to triple digit interest rates when their state legislatures did not: Arizona, Montana and Ohio.
  • Seventeen states and the District of Columbia have enacted double-digit rate caps on payday loans.
  • Studies have shown that payday borrowers are more likely to have credit card delinquency, unpaid medical bills, overdraft fees leading to closed bank accounts, and even bankruptcy.