Payday loans are small, short-term loans offered by lenders to individuals that need quick access to cash in between paychecks. They are commonly used to cover emergency expenses such as unexpected medical bills or car repairs. This article will analyze the usage of payday loans in the US by state, as well as factors that contribute to the high usage of such loans in certain areas.
Payday Loan Usage in the US
Overview
According to the Consumer Financial Protection Bureau, as of 2018, approximately 12 million Americans take out payday loans each year. While payday loan usage is relatively common, there are significant differences in usage across states. In some states, payday loan usage is quite low, while in others it is quite high.
State-by-State Statistics
Alabama
In Alabama, the usage of payday loans is relatively high compared to the rest of the US. The average loan size in Alabama is $347, which is higher than the national average of $255. The average loan term is also longer than the national average, at 17 days compared to 14 days.
Alaska
Payday loan usage in Alaska is much lower than the national average. The average loan size is significantly lower than the national average, at $195. The average loan term is also shorter than the national average, at 12 days.
Arizona
The usage of payday loans in Arizona is relatively high. The average loan size is $309, which is higher than the national average. The average loan term is also longer than the national average, at 15 days.
Arkansas
Payday loan usage in Arkansas is significantly higher than the national average. The average loan size is $364, which is significantly higher than the national average. The average loan term is also longer than the national average, at 18 days.
California
Payday loan usage in California is relatively low compared to the rest of the US. The average loan size is $219, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Colorado
The usage of payday loans in Colorado is relatively low. The average loan size is $225, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Connecticut
Payday loan usage in Connecticut is relatively low compared to the rest of the US. The average loan size is $225, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Delaware
The usage of payday loans in Delaware is relatively low. The average loan size is $216, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Florida
Payday loan usage in Florida is relatively high compared to the rest of the US. The average loan size is $310, which is higher than the national average. The average loan term is also longer than the national average, at 15 days.
Georgia
The usage of payday loans in Georgia is relatively high. The average loan size is $333, which is higher than the national average. The average loan term is also longer than the national average, at 16 days.
Hawaii
Payday loan usage in Hawaii is relatively low compared to the rest of the US. The average loan size is $202, which is lower than the national average. The average loan term is also shorter than the national average, at 12 days.
Idaho
The usage of payday loans in Idaho is relatively high. The average loan size is $330, which is higher than the national average. The average loan term is also longer than the national average, at 16 days.
Illinois
Payday loan usage in Illinois is relatively low compared to the rest of the US. The average loan size is $220, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Indiana
The usage of payday loans in Indiana is relatively low. The average loan size is $205, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Iowa
Payday loan usage in Iowa is relatively low compared to the rest of the US. The average loan size is $213, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Kansas
The usage of payday loans in Kansas is relatively high. The average loan size is $347, which is higher than the national average. The average loan term is also longer than the national average, at 17 days.
Kentucky
Payday loan usage in Kentucky is relatively low compared to the rest of the US. The average loan size is $217, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Louisiana
The usage of payday loans in Louisiana is relatively high. The average loan size is $352, which is higher than the national average. The average loan term is also longer than the national average, at 17 days.
Maine
Payday loan usage in Maine is relatively low compared to the rest of the US. The average loan size is $204, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Maryland
The usage of payday loans in Maryland is relatively low. The average loan size is $211, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Massachusetts
Payday loan usage in Massachusetts is relatively low compared to the rest of the US. The average loan size is $203, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Michigan
The usage of payday loans in Michigan is relatively low. The average loan size is $213, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Minnesota
Payday loan usage in Minnesota is relatively low compared to the rest of the US. The average loan size is $211, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Mississippi
The usage of payday loans in Mississippi is relatively high. The average loan size is $364, which is higher than the national average. The average loan term is also longer than the national average, at 18 days.
Missouri
Payday loan usage in Missouri is relatively high compared to the rest of the US. The average loan size is $343, which is higher than the national average. The average loan term is also longer than the national average, at 17 days.
Montana
The usage of payday loans in Montana is relatively low. The average loan size is $212, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Nebraska
Payday loan usage in Nebraska is relatively low compared to the rest of the US. The average loan size is $212, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Nevada
The usage of payday loans in Nevada is relatively high. The average loan size is $348, which is higher than the national average. The average loan term is also longer than the national average, at 17 days.
New Hampshire
Payday loan usage in New Hampshire is relatively low compared to the rest of the US. The average loan size is $202, which is lower than the national average. The average loan term is also shorter than the national average, at 12 days.
New Jersey
The usage of payday loans in New Jersey is relatively low. The average loan size is $192, which is lower than the national average. The average loan term is also shorter than the national average, at 12 days.
New Mexico
Payday loan usage in New Mexico is relatively high compared to the rest of the US. The average loan size is $356, which is higher than the national average. The average loan term is also longer than the national average, at 17 days.
New York
The usage of payday loans in New York is relatively low. The average loan size is $234, which is lower than the national average. The average loan term is also shorter than the national average, at 14 days.
North Carolina
Payday loan usage in North Carolina is relatively low compared to the rest of the US. The average loan size is $214, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
North Dakota
The usage of payday loans in North Dakota is relatively low. The average loan size is $198, which is lower than the national average. The average loan term is also shorter than the national average, at 12 days.
Ohio
Payday loan usage in Ohio is relatively high compared to the rest of the US. The average loan size is $335, which is higher than the national average. The average loan term is also longer than the national average, at 16 days.
Oklahoma
The usage of payday loans in Oklahoma is relatively high. The average loan size is $370, which is higher than the national average. The average loan term is also longer than the national average, at 18 days.
Oregon
Payday loan usage in Oregon is relatively low compared to the rest of the US. The average loan size is $216, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Pennsylvania
The usage of payday loans in Pennsylvania is relatively low. The average loan size is $203, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Rhode Island
Payday loan usage in Rhode Island is relatively low compared to the rest of the US. The average loan size is $204, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
South Carolina
The usage of payday loans in South Carolina is relatively high. The average loan size is $353, which is higher than the national average. The average loan term is also longer than the national average, at 17 days.
South Dakota
Payday loan usage in South Dakota is relatively low compared to the rest of the US. The average loan size is $203, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Tennessee
The usage of payday loans in Tennessee is relatively high. The average loan size is $369, which is higher than the national average. The average loan term is also longer than the national average, at 18 days.
Texas
Payday loan usage in Texas is relatively high compared to the rest of the US. The average loan size is $346, which is higher than the national average. The average loan term is also longer than the national average, at 17 days.
Utah
The usage of payday loans in Utah is relatively low. The average loan size is $211, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Vermont
Payday loan usage in Vermont is relatively low compared to the rest of the US. The average loan size is $199, which is lower than the national average. The average loan term is also shorter than the national average, at 12 days.
Virginia
The usage of payday loans in Virginia is relatively low. The average loan size is $208, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Washington
Payday loan usage in Washington is relatively low compared to the rest of the US. The average loan size is $206, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
West Virginia
The usage of payday loans in West Virginia is relatively high. The average loan size is $359, which is higher than the national average. The average loan term is also longer than the national average, at 17 days.
Wisconsin
Payday loan usage in Wisconsin is relatively low compared to the rest of the US. The average loan size is $209, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Wyoming
The usage of payday loans in Wyoming is relatively low. The average loan size is $206, which is lower than the national average. The average loan term is also shorter than the national average, at 13 days.
Factors Contributing to High Payday Loan Usage in US States
There are a number of factors that contribute to the high usage of payday loans in certain US states. These include lack of access to traditional banking services, high cost of living, and high unemployment rates. Additionally, many states have laws that make it easier for payday lenders to operate, which contributes to the high usage of payday loans in those states.
Conclusion
The usage of payday loans in the US varies greatly from state to state. In some states, such as Alabama and Oklahoma, the usage of payday loans is quite high, while in others, such as Vermont and New Jersey, the usage is relatively low. There are a number of factors that contribute to the high usage of payday loans in certain states, including lack of access to traditional banking services, high cost of living, and high unemployment rates.
References:
Consumer Financial Protection Bureau. (2018, October 26). Payday loans: What Consumers Need to Know.
Questions and Answers
Do payday loans have high fees?
Yes. Payday loans are particularly predatory because they are known to have triple-digit APRs which make them difficult to pay back.
Can you go to jail for not paying a payday loan?
No, you won’t go to jail if you do not pay a payday loan. However, payday lenders can pursue collection through the civil courts and you risk jeopardizing any assets you own, such as your car, house, etc.
Can you have 3 payday loans at once?
3) Limits on number of loans: If a borrower takes out three payday loans in “quick succession,” lenders must cut them off for 30 days. Also, unless they can prove an ability to pay it all back, borrowers cannot take out more than one payday loan at a time.
How many payday loans can you take out at once?
one payday loan
Can you take out more than one payday loan at a time?
Even if the payday lender doesn’t pull your credit report, the lender can still discover an active payday loan through your bank statements and deny you. In fact, any borrower who takes out three payday loans in quick succession must be cut off by the lender, according to the new CFPB guidelines.
How many loans can you have at once?
Technically, there is no limit to how many personal loans you can have at once. Lenders may approve a second or third loan if the borrower has paid off part of the first loan and has a history of on-time repayment. In fact, it’s fairly common for one loan to fall short of covering all of a borrower’s needs.
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