Payday Loans and Tax Time
This infographic provides a snapshot of the impact of payday loans on borrowers. Payments are unaffordable for the budgets of most payday loan borrowers, and 1 in 6 has used a tax refund to eliminate payday loan debt. Similar to payday borrowers, 1 in 5 auto title loan borrowers reports using a tax refund to repay a title loan.
Note: This infographic was updated on April 13, 2016, to include source information.
Recent WorkView All
Payday loans typically carry annual percentage rates of 300 to 500 percent and are due on the borrower’s next payday (roughly two weeks later) in lump-sum payments that consume about a third of the average customer’s paycheck, making the loans difficult to repay without borrowing again. They are characterized by unaffordable payments, unreasonable loan terms, and unnecessarily high... Read More
Typical payday loans have unaffordable payments, unreasonable durations, and unnecessarily high costs: They carry annual percentage rates (APRs) of 300 to 500 percent and are due on the borrower’s next payday (roughly two weeks later) in lump-sum payments that consume about a third of the average customer’s paycheck, making them difficult to repay without borrowing again. Read More
Nick Bourke is director of consumer finance at Pew, which includes the small-dollar loans and consumer banking projects. These teams conduct research on payday and other small loans and study the accounts that Americans rely on every day to manage their finances, such as checking accounts, prepaid cards, and mobile payments. They also offer recommendations designed to protect consumers from... Read More