CFPB Confirms Debt Trap

From Center for Responsible Lending

Payday loans lead many borrowers into cycles of debt, according to a new white paper by the Consumer Financial Protection Bureau. Among the study's findings: most payday loan borrowers make less than $30,000 annually, and the average borrower is in debt for nearly 200 days a year.

Did you know?

• More than 1/2 of payday loan customers remain in debt for 199 day out of the year (more than six months) while the average repayment period for a payday loan is approximately 2 weeks.
• The average amount borrowed on a payday loan is $350 but the total fees paid over a 12 month period for payday loans is $458.
• 1/2 of all payday loan customers earn $22,476 or less.
• 25% of all payday loan customers report some form of public assistance or other benefits.
• Virginia offers a minimum of two payday cycles for loan repayment and a madated cooling-off period after loan repayment.