Statistics of payday loans in 2020
Sometimes there seems to be a lack of data and statistics on the payday loan industry. The industry is often criticized by lawmakers, consumer rights groups and even the media. It is difficult to know what the balance of the payday loan industry is, subtle, fact-based estimates. Flex Loans Online collects payday statistics and academic research from different lenders and sources to provide the following content, with the purpose of providing some inspiration for the entire industry and the history and market background of the products provided by the alternative financial services industry
- In the United States, approximately 2.5 million families use at least one payday loan each year. This means that every year about one in ten Americans use products provided by the industry. (The Economist)
- The legality of the United States (Wikipedia) by payday loan status
- The average borrower of payday loans earns about $30,000 a year, and about 58% of them have difficulty meeting monthly expenses. (Pew Charitable Trust)
- About 70% of borrowers on payday loans use it for daily recurring expenses, such as rent. (Pew Charitable Trust)
- Approximately 1.2 billion Americans use payday loan products (Federal Reserve) every year
- About 25% of Americans do not have a bank account and cannot use the traditional consumer finance option (CNBC)
- About 12% of the U.S. population has a very poor or bad credit score, which makes them have to choose other forms of loans, such as payday loans (Experian)
- The states with the most payday creditors in the United States include New Mexico, Kentucky, Louisiana, Alabama, Mississippi, Utah, and South Dakota (CreditRepair)
- The countries with the highest interest rates in the United States and ARP (Responsible Loan Center)
Payday loan statistics topic
- Geographical location of the borrower
The typical payday loan borrower may not be what people think. Although payday loan borrowers are usually described as working poor, they have an annual income of $47,620 and are most likely the homeowner.
- Short-term credit fees
Payday loan fees are usually described as annualized interest rates or APR-the same standards as auto loans, credit cards and mortgages that take years to repay. Most payday loans are repaid within two weeks, but some other things (such as overdraft fees) may bring higher interest rates when expressed in APR.
- Loan Conventions
Many people are considered to be payday lenders and licensed usurers who deceive poor people who don’t know the product well. However, compared with the credit card industry, the poor are not the typical customers of payday lenders. Compared with the credit industry, lenders usually make the terms as easy to understand as possible. In the credit card industry, only 20% of customers fully understand the cost of the service.
Flex Loans Online owns financial shares in the payday loan industry and fully disclosed this fact. However, Flex Loans Online is not a direct lender, but cooperates with many banks, so it can provide unique insights and is expected to provide some inspiration for the industry and its trends.
Although payday loans are a short-term solution, they are often mentioned in terms of annual or annual interest rates, which is incorrect. They will be repaid on the next payday.
So using the same “thinking” here are some other examples you have never heard of, but actually cost more.
Online borrowing can help you save!
|*Prepayments are not annual; numbers are for comparison only|
|If you have a $100 returned check and need to repay the $34 NSF fee within 10 days||The annual interest rate you pay is 1,241%||If you have a $100 debit card overdraft and repay the $37 fee within 5 days||You paid an annual interest rate of 2,701%||If you have a $100 utility bill, you need to pay a late fee/reconnection fee of $46 within 14 days.||The annual interest rate you pay is 1,203%|