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.
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Nick Bourke directs Pew's research on consumer needs and perceptions, market practices, and potential regulation of payday and other small-dollar loan providers. The project also offers policy recommendations designed to protect consumers from harmful practices and promote safe, transparent credit. Read More
Proposed regulations from the Consumer Financial Protection Bureau (CFPB) would protect consumers from conventional, lump-sum payday loans, which Pew’s research has shown usually have unaffordable payments that trigger reborrowing. The pending rule strongly encourages payday and auto title lenders to give borrowers more time to repay loans in smaller installments, rather than large lump-sum... Read More
In June, the Consumer Financial Protection Bureau (CFPB) released a proposed rule to regulate payday, auto title, and some high-cost installment loans. The proposal applies to “covered loans” from any lender, including payday, auto title, online, and nonbank installment lenders as well as banks and credit unions, but not to overdraft services, pawn loans, business loans, and other... Read More