{"id":356311,"date":"2019-04-17T07:00:38","date_gmt":"2019-04-17T13:00:38","guid":{"rendered":"https:\/\/www.creditrepair.com\/blog\/?p=356311"},"modified":"2022-03-30T19:07:40","modified_gmt":"2022-03-31T01:07:40","slug":"states-with-most-payday-loans","status":"publish","type":"post","link":"https:\/\/www.creditrepair.com\/blog\/finance\/states-with-most-payday-loans\/","title":{"rendered":"States with the Most Payday Loans"},"content":{"rendered":"\n
\"man<\/figure>\n\n\n\n

You can categorize American States into two groups: states\nwhere payday loans have been banned versus those where payday loans are regulated.\nThe latter category has more states with laws guiding the limits on loan\namounts and interest rates, as well as the number of loan renewals that\nconsumers can apply for. <\/p>\n\n\n\n

Why the interest on payday loans, you ask?<\/p>\n\n\n\n

Payday loans have become infamous for their excessive charges\nand debt-traps, even though they are easier to access when compared\nto personal loans<\/a>.\nObtaining a payday loan isn’t difficult. All the borrower needs to do is to\nshow evidence of employment and a record of previous payroll. <\/p>\n\n\n\n

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On a payday loan of $375 a borrower is expected to payback $520 within two to four weeks, resulting in a 390% (APR)<\/p><\/blockquote><\/figure>\n\n\n\n

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It\u2019s quite unfortunate that consumers of payday loans are generally\nmore concerned about loan procurement but not so much when it comes to the high\ninterest rates. On a payday loan of $375, for instance, the borrower is\nexpected to payback $520 within two to four weeks, resulting in a 390% annual percentage rate<\/a> (APR)\u2013yet borrowers don’t dwell on the\nlogistics and how they will repay the loan as much as they do on procuring the\nloan. <\/p>\n\n\n\n

Research\nshowed that the average borrower took out no less than eight payday loans in\njust one year, having to pay as high as 600% APR sometimes. After paying out\nloans from their wages, the borrower has less-than-sufficient or even\nnon-sufficient funds to carry themselves until the next paycheck, so they quickly\nrequest another cash advance with very high rates and continue to service the\nsmall loan until they find they\u2019re in a sequence of loan, or rollover, and finally get into a debt-trap. <\/em> <\/em>This\npicture is true of 80%\npayday borrowers<\/a>. <\/em><\/p>\n\n\n\n

\"payday<\/figure>\n\n\n\n

Some\nstates<\/a> are\nalready protecting their citizens from the massively high rates applied by\npayday lending institutions by setting cap rates on payday loans and regulating\nthe operations of the service provider. Others have gone ahead and decided to prohibit\npayday lending completely.<\/p>\n\n\n\n

States which have prohibited payday lending include Arizona, Arkansas, Connecticut, Georgia,\nMaryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania,\nVermont<\/strong> and West Virginia.<\/strong> <\/p>\n\n\n\n

Where You Find Most Payday Lenders<\/strong><\/h2>\n\n\n\n

Being an unsecured loan, a payday advance usually targets low income earners and persons living around\nmilitary bases. These are people often strapped for cash but can’t provide any\ncollateral to obtain and gain the benefits of a personal loan.<\/p>\n\n\n\n

According to California State University researchers<\/a>, payday loan stores nearly outnumber\nMcDonald\u2019s in most of the states where payday businesses thrive. The state of California<\/strong> has the highest number of\npayday lenders (2,451) followed by Texas<\/strong>\n(1,675) while Rhode Island has the least (5). However, looking at the per\ncapita statistic, New Mexico<\/strong> comes\nfirst if we consider the amount of payday\nstores per 100,000 people.<\/p>\n\n\n\n

The following list shows the top ten states with the highest\nnumber of payday lenders:<\/p>\n\n\n\n

State                  <\/strong><\/td>Payday Lenders <\/a><\/strong>
per 100,000<\/a><\/strong><\/td>		 <\/strong>APR<\/strong><\/a>           <\/strong><\/td><\/tr>
New Mexico<\/td>41.78<\/span><\/td>416%<\/td><\/tr>
South Dakota<\/td>40.01<\/span><\/td>36%<\/td><\/tr>
Mississippi<\/td>38.67<\/span><\/td>520%<\/td><\/tr>
Alabama<\/td>26.47<\/span><\/td>456%<\/td><\/tr>
Tennessee <\/td>23.62<\/span><\/td>459%<\/td><\/tr>
Louisiana <\/td>22.58<\/span><\/td>391%<\/td><\/tr>
South Carolina <\/td>22.48<\/span><\/td>390%<\/td><\/tr>
Missouri<\/td>22.47<\/span><\/td>1950%<\/td><\/tr>
Utah<\/td>19.12<\/span><\/td>No limit<\/td><\/tr>
Kentucky<\/td>17.49<\/span><\/td>459%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n\n\n

Missouri<\/strong> has the highest APR from the list, attracting\nas high as 1950% on a 14-day, $100 loan. However, state laws require payday\nbusinesses to provide borrowers with all the relevant information including\ninterest rates and service charges before granting them a payday advance loan.\nIn Utah<\/strong>, there are no limits on the\namount of money that loan borrowers can apply for, nor are there restrictions\non the interest rates that lenders can charge-as long as the lenders meet other\nrequirements for setting up a payday lending business within the state. <\/p>\n\n\n\n

Payday loans in South\nDakota<\/strong> are strictly regulated to protect citizens, so consumers aren’t\nallowed to take out more than one $500 payday loan at a time, and the APR is pegged at 36% maximum in the state.<\/p>\n\n\n\n

The average rate in all ten states is 564%, which means payday\nlender charges can get tough on borrowers. This\nexplains why most states have legislation\nagainst usury by limiting interest charges to between 35% and 40% yet payday\nlenders continue to seek loopholes under different laws that permit them to charge\nhigh rates. So, the onus is on borrowers to beware of attractive<\/strong> payday packages.<\/p>\n\n\n\n

How to Break Loose from Payday Debt Traps<\/strong><\/h2>\n\n\n\n

In case you find yourself trapped in a cycle of payday bailouts, you aren’t alone. Twelve million\nAmericans take out payday loans for fast cash every year,\nspending up to $9 billion<\/a>\non loan\npayments. Payday loans can be deceiving and predatory due to their sky-high rates.\nWhat loan borrowers thought was a quick-fix and\na small loan for unexpected expenses can\neventually turn into a debt trap that they struggle with for years-notwithstanding escape routes for those\nwho might have been negatively affected by payday loans.<\/p>\n\n\n\n

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Twelve million Americans take out payday loans every year, spending up to $9 billion on loan payments<\/p><\/blockquote><\/figure>\n\n\n\n

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Start by cutting back on your expenses.<\/strong> The very basic step to leaving any debt zone behind is proper financial\nplanning and management. Most payday loans are\nused on expenses like rent and food and\nthese can be managed with a good budget in place. You will likely find\nalternatives to cater for the things you take out loans for. <\/p>\n\n\n\n

\"payday<\/figure>\n\n\n\n

Extended Payment Plans (EPPs)<\/strong> are available in most payday lending\ninstitutions under the Community Financial Services Association of America\n(CFSA). EPPs allow you more time to pay your loans without extra charges\nwhatsoever. In some cases, state laws require payday lenders to provide\nrepayment extension options for borrowers. Find out from your lender or the\nstate laws and make sure you apply before your loan is due.<\/p>\n\n\n\n

Credit Counseling Agencies <\/strong>can possibly help you adjust the repayment terms-just like the EPP option-through a restructure payback service,\nbut if that doesn’t work, they can agree to negotiate a settlement amount with\nyour lender in order to clear the debt\nonce and for all.<\/p>\n\n\n\n

Declare Bankruptcy<\/strong> as a last resort if you are desperate\nto get rid of payday debts and you don\u2019t\nmind having it on your credit report for as long as 10 years.<\/p>\n\n\n\n

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Whether you live in a state where payday loans are prohibited\nor a state where they are moderated, it’s advisable to thoroughly\nresearch the state laws and APR amounts before taking out any loans. Payday\nlenders often operate under the guise of financial help and assistance, but\ntheir exorbitant charges can leave the\nborrower in debt for a lifetime. <\/p>\n\n\n\nCarry on the conversation on our social media platforms. Like and follow us on Facebook<\/a> and leave us a tweet on Twitter<\/a>.\n\n\n\n\n\n

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