How Many Payday Lenders Are There In The US Today?

According to a CNBC report from February 2021, there are approximately 23,000 payday lenders in the U.S, combined of stores and online providers which is almost twice the number of McDonald’s restaurants.

Payday lending has grown massively in popularity over the last two decades, but newer regulations across the country aim to reduce the amount of payday lending stores in the US. These new regulations are in place to attempt to limit the amount of customers struggling to repay these particularly high cost loans.

Key Points:

• There are around 23,000 regulated payday lenders operating in the US.
• The states which house the highest number of lenders are California with 2,451, Tennessee with 1,344, and Mississippi with 1,100 lenders.
• Payday loans are legal in 37 US states, while they are prohibited in states including Arizona, New York and Pennsylvania.
• It is estimated that 6% of American adults have used a payday loan in their adult life.
• The respective US states have individual regulations on their loans, such as having varying caps on interest and how much you can borrow. For instance, in California you can only borrow up to $300.

Which States Use The Most Payday Loans?

In some states where payday lending is legal, there are a high number of lenders for borrowers to choose from. According to the data, the most payday lenders can be found in California (2,451), Tennessee (1,344), and Mississippi (1,100).

The research also states that the highest concentrations of payday loan businesses per 100,000 people are in New Mexico (41.78), South Dakota (40.01), and Mississippi (38.67).

Where Are Payday Loans Prohibited?

Certain states have taken decisive measures to protect consumers by prohibiting payday loan lenders altogether. The 12 states where payday lending does not exist include Arkansas, Arizona, Georgia, Maryland, Massachusetts, New York, New Jersey, North Carolina, New Mexico, West Virginia, Vermont, and Pennsylvania.

In these states, payday lending is illegal as a commitment to safeguarding individuals from the potential financial pitfalls associated with this form of borrowing. In contrast, other states permit payday lending but impose various restrictions to protect borrowers.

While Payday Loans Are Legal In…

Thirty-three states either enacted legislation authorizing payday loans, failed to close loopholes exploited by the industry to make high-cost loans, or deregulated small loan interest rate caps.

Payday loan states include: Alabama, Alaska, California, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming.

Some authorizing states somewhat limit debt-trap risks. For example, Washington limits borrowers to eight payday loans per year. Virginia requires loans to be payable in two pay cycles; however, lenders evade protections in Virginia by structuring loans as unregulated open-end lines of credit.

Am I Eligible For A Payday Loan?

The criteria may vary from lender-to-lender and whilst you might initially meet the basic criteria, some lenders might be more strict in terms of your minimum monthly income and also for those who are on welfare, self-employed and have not been employed for long than a few weeks or months.

However, it is important to note that if you do not meet this basic criteria, your loan application is likely to get declined early on. The basic criteria includes:

• You must be a legal US citizen.
• At least 18 years of age.
• Working full-time or part-time, with a regular income of at least $800 a month.
• You must have a valid current/checking account, for your loan to be paid into.
• You can’t have had a recent bankruptcy.

You can even get a payday loan if you have bad credit; Dime Alley accepts people with all types of credit histories. As the broker, we find the most suitable lender for you that it most likely to accept your payday loan claim.

Who Uses Payday Loans?

It is estimated that around 6% of adult Americans who have used a payday loan at some point in the last five years.

This is particularly an emerging market for a younger target audience; in fact, the majority of that 6% are between 18 to 24 years old.

Americans spend around $4 billion annually in payday loans fees. The market of payday lending costs about $7 billion, accommodating 12 million borrowers, in the United States annually.