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Payday loans are small-dollar, high-interest loans requiring full payback on the borrower’s next payday. They carry triple-digit annual interest rates, are due in full on a borrower’s next payday, require direct-debit access to a borrower’s bank account, and are made with little or no regard for a borrower’s ability to repay the loan. Because of these features, borrowers often cannot both repay the payday loan and meet their other obligations without having to quickly re-borrow, pulling them into a vicious debt trap.
In Minnesota, a typical payday loan is $417 and carries an APR of 208%, and is re-borrowed an average of seven times in a year. Payday loans don’t solve financial pressures; they make them worse.
In Minnesota, a typical payday loan is $417 and carries an APR of 208%, and is re-borrowed an average of seven times in a year. Payday loans don’t solve financial pressures; they make them worse.
