Pew's small-dollar loans project focuses on conducting research that demonstrates the needs, perceptions, and motivations of consumers, as well as the impacts of market practices and potential regulations. Based on this research, the project puts forth policy recommendations designed to protect consumers from harmful practices and promote safe and transparent small-dollar credit.
Research & AnalysisView All
Pew has conducted extensive research on the high-cost small-dollar loan market over the past five years. The findings show that although these products offer quick cash, the unaffordable payments lead consumers to quickly take another loan to cover expenses. Twelve million Americans take out payday loans each year, spending more than $7 billion on loan fees. Read More
The Consumer Financial Protection Bureau (CFPB) has issued a proposed framework to regulate payday and similar high-cost, small-dollar loans. Overall, the proposal could transform the market in positive ways by requiring most products to become installment loans with smaller, more manageable payments and providing safeguards for consumers. Read More
Each year, about 12 million Americans take out payday loans. Interest rates are very high, with APRs averaging 390 percent. By the time the loan is repaid, the fees involved typically have far exceeded the original loan amount. Fees paid on these loans total about $7 billion a year, burdening borrowers—many living paycheck-to-paycheck—who cannot afford such financial strain. Read More