Knowledge Tree
payday loans
Facts (43)
Sources
The Impacts of Individual and Household Debt on Health and Well ... apha.org Oct 25, 2021 31 facts
claimHigh-cost credit, often referred to as "predatory" due to very high interest rates, includes payday loans, pawn shops, rent-to-own services, tax refund anticipation loans, and auto title loans.
measurementUrban and rural residents are twice as likely as suburban residents to use payday loans.
measurementHigh-interest payday loans are currently illegal in 18 states and the District of Columbia, where interest rates are typically capped at 36%.
measurementBlack people are three times more likely to use payday loans than White people.
claimSweet, Kuzawa, and McDade (2018) identified payday loans as risk factors for anxiety, inflammation, and poor health in the journal Population Health.
claimCredit cards offer convenience, longer payback periods, and lower interest rates compared to payday loans and other forms of predatory credit.
measurementThe volume of payday loans in the United States increased from $5 billion in 1995 to $45 billion in 2013.
claimSpecific forms of debt, including student loans, medical debt, credit cards, high-cost credit (such as payday loans), legal financial obligations, and child support debt, are predictors of poor health in addition to overall levels of unsecured debt.
referenceThe Pew Charitable Trusts published a fact sheet titled 'Payday loan facts and the CFPB’s impact' which examines the role of payday loans and the regulatory influence of the Consumer Financial Protection Bureau.
claimSpecific forms of debt, including student loans, medical debt, credit cards, high-cost credit (such as payday loans), legal financial obligations (LFOs), and child support debt, are predictors of poor health.
measurementPayday loans can have interest rates exceeding 600% according to a CNBC report by M. Leonhardt published on February 16, 2021.
claimHigh-cost credit, often referred to as predatory loans, includes payday loans, pawn shops, rent-to-own services, tax refund anticipation loans, and auto title loans, and is characterized by very high interest rates.
measurementPeople with disabilities are twice as likely as the general population to use payday loans, with a usage rate of 12% compared to 6%.
referenceEisenberg-Guyot, Firth, Klawitter, and Hajat authored the article 'From payday loans to pawnshops: fringe banking, the unbanked, and health', published in Health Affairs in 2018 (Volume 37, pages 429–437).
referenceEisenberg-Guyot J, Firth C, Klawitter M, and Hajat A examined the relationship between fringe banking (payday loans and pawnshops), the unbanked population, and health outcomes in a 2018 study.
claimSpecific forms of debt, including student loans, medical debt, credit cards, high-cost credit (such as payday loans), legal financial obligations, and child support debt, are predictors of poor health.
perspectiveThe American Public Health Association recommends that interest rates for payday and similar high-interest loans be limited to 36% or lower, consistent with protections currently provided to members of the military.
measurementThe volume of payday loans in the United States increased from $5 billion in 1995 to $45 billion in 2013.
claimHigh-interest payday loans were illegal in the United States prior to the 1980s, and currently, 18 states and the District of Columbia prohibit them by capping interest rates, typically at 36%.
perspectiveThe Consumer Financial Protection Bureau should require that payday loans and similar high-interest loans account for the applicant's ability to pay and limit repeat borrowing.
claimFringe banking services, including payday loans and pawnshops, are linked to health outcomes for the unbanked population, according to a 2018 study by Eisenberg-Guyot, Firth, Klawitter, and Hajat.
measurementThe volume of payday loans in the United States increased from $5 billion in 1995 to $45 billion in 2013.
perspectiveThe Consumer Financial Protection Bureau should require that payday loans and similar high-interest loans account for the applicant’s ability to pay and limit repeat borrowing.
measurement52% of people who use payday loans are women.
measurementPayday loans can have interest rates exceeding 600% in some U.S. states, according to a report cited by CNBC.
claimThere is no evidence of increased illegal lending in US states that have implemented interest rate caps on payday loans.
claimThere is no evidence of increased illegal lending in US states that have implemented interest rate caps on payday loans.
claimSweet, Kuzawa, and McDade (2018) identified payday loans as risk factors for anxiety, inflammation, and poor health in a study published in Population Health.
claimThere is no evidence that capping interest rates on payday loans leads to an increase in illegal lending practices in the United States.
referenceEisenberg-Guyot J, Firth C, Klawitter M, and Hajat A. studied the health impacts of fringe banking, including payday loans and pawnshops, in 2018.
claimHigh-cost credit, often referred to as 'predatory' due to very high interest rates, includes payday loans, pawn shops, rent-to-own services, tax refund anticipation loans, and auto title loans.
Predatory Lending — An Explainer - MECEP mecep.org Mar 24, 2023 6 facts
measurementApproximately 12 million Americans utilize payday loans annually.
measurement18 states and the District of Columbia have established a 36 percent interest rate cap on payday loans.
claimMaine law prohibits car-title loans, caps interest rates on payday loans under $2,000 at 30 percent, and explicitly outlaws 'rent-a-bank' schemes.
claimCommon forms of predatory lending include payday loans, car-title loans, and subprime mortgages.
measurementNationwide, interest rates for payday loans typically range from 390 to 780 percent, compared to an average credit card interest rate of approximately 24 percent.
perspectiveMaine lawmakers should close fee loopholes to establish an all-inclusive 30 percent interest rate cap on payday loans under $2,000.
Financial Rules of Thumb: Your Money Management Cheat Sheet champlain.edu Apr 9, 2025 2 facts
claimGood debt is defined as debt taken on to increase income or net worth over time, such as education loans, mortgages, and business loans, because these scenarios provide a return on investment. Bad debt is defined as debt that does not generate future income and often finances non-necessities, such as high-interest credit card debt, payday loans, and rent-to-own agreements.
claimBad debt is defined as debt that does not generate future income and is typically used to finance non-necessities, such as high-interest credit card debt, payday loans, and rent-to-own agreements.
Beware of predatory lending practices - Exclusives exclusives.mgcafe.uky.edu Aug 19, 2021 1 fact
claimCommon predatory lending techniques include payday loans, car title loans, and subprime mortgages.
Lender abuses - Inclusive Digital Financial Services - World Bank digitalfinance.worldbank.org 1 fact
referenceIn British Columbia, Canada, tied selling is prohibited for payday loans, and agreements must explicitly state that the supply of ancillary goods or services is separate and optional.
Payday Lending: An Ethics Evaluation - Seven Pillars Institute sevenpillarsinstitute.org Oct 17, 2018 1 fact
measurementPayday loans commonly have interest rates of 400% or more.
The Four Components of Personal Finance - OneMain Financial onemainfinancial.com Feb 3, 2022 1 fact
perspectivePayday loans and debt settlement companies are considered dangerous financial options that can cause long-term harm to an individual's financial health.