A CNBC report from February 2021 says there are about 23,000 payday lenders in the United States. This includes both stores and lenders who work online.
Over the past two decades, payday lending has become incredibly popular, but newer laws across the nation attempt to limit the number of payday lending businesses in the US. These new rules are in place in an effort to reduce the number of consumers who have trouble repaying these very expensive loans.
This post will inform you more about payday lending services in the United States.
There are more than 23,000 facilities offering payday loans through physical and online storefronts.
How many payday loan stores are there in the United States?
In the USA, more than 23,000 facilities offer payday loans. This is due to the fact that the number only includes companies with physical stores.
The notion of a store—any store—has shifted with the advent of technology. There has been a significant increase in demand as a result of payday loans going online.
Thanks to the Internet, lenders and borrowers can now enter into loan arrangements without physically meeting one another.
It is estimated that 6% of adult Americans have used a payday loan at some point in the last five years. In reality, the bulk of that 6% is between 18 and 24, making this a rising market, particularly for a younger target audience.
Payday loans cost Americans $4 billion a year on average. In the United States, the annual cost of the $7 billion payday loan sector in the United States serves 12 million borrowers.
Lenders are increasing their operations rapidly to cater to such substantial amounts of payday loans. We can see a meteoric rise in offline storefronts and online payday services being opened recently.
Where can Payday Loan Stores be found in the US?
Payday loan lending is not permitted in all states. There have been several discussions about it among borrowers and legislators. Due to this, there are now variations in the rules and laws governing payday loans. It is essential to know if you live in a state that allows payday loans.
Different states have different laws governing payday loans. as of March 2021.
- There are no restrictions on payday loans in 32 states.
- Twelve states have strict laws against payday lending, while other states allow it, albeit with restrictions.
- The District of Columbia and 16 other US states have implemented interest rate caps.
Payday loans are permitted in the following jurisdictions: Alabama (AL), Alaska (AK), California (CA), Delaware (DE), Florida (FL), Hawaii (HI), Idaho (ID), Indiana (IN), Iowa (IA), Kansas (KS), Kentucky (KY), Louisiana (LA), Michigan (MI), Minnesota (MN), Mississippi (MS), Missouri (MO), Nevada (NV), North Dakota (ND), Rhode Island (RI), South Carolina (SC), Tennessee (TN), Texas (TX), Utah (UT), Wisconsin (WI), and Wyoming (WY).
The states that allow conditional payday loans are Maine (ME), New Mexico (NM), Ohio (OH), Oklahoma (OK), Oregon (OR), Virginia (VA), and Washington (WA).
Some approving states reduce debt-trap risks in some ways. For instance, Washington only allows borrowers to take out eight payday loans annually. Virginia mandates that loans be repaid within two pay cycles, but lenders skirt Virginian laws by arranging loans as unrestricted, open-end credit lines.
Which states have the largest number of payday loan stores?
According to the study, New Mexico (41.78), South Dakota (40.01), and Mississippi (38.67) have the highest densities of payday lending shops per 100,000 residents.
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What is the trend for payday stores in the USA?
The use of online payday stores has grown significantly recently. Payday loan costs are paid for $9 billion annually.
Particularly in the current aftermath COVID environment, the CFPB expects to see a sharp decline in the number of payday loan outlets.
Around 3% of Americans report having to take out a payday loan, deposit advance, or flea market loan due to the financial difficulties the coronavirus has caused.
It is intended that over the next few years, more rules will be implemented to lessen the risk of exploitative payday lending.
The Consumer Financial Protection Bureau (CFPB) reports that new laws on payday lending are expected to eventually cut the volume of payday loans by about 65% and dramatically decrease the number of physical storefronts (by 71–76%).