CFPB Finds Four Away Of Five Payday Advances Are Rolled Over Or Renewed

CFPB Finds Four Away Of Five Payday Advances Are Rolled Over Or Renewed

Studies have shown almost all of payday advances are created to Borrowers Caught in a Revolving Door of financial obligation

WASHINGTON, D.C. — Today, the customer Financial Protection Bureau (CFPB) issued a study on payday lending discovering that four away from five loans that are payday rolled over or renewed within week or two. The analysis additionally demonstrates that nearly all all payday advances are created to borrowers whom renew their loans countless times which they wind up spending more in fees compared to the sum of money they initially borrowed.

“We are concerned that too many borrowers slide to the debt traps that payday advances may become,” said CFPB Director Richard Cordray. “As we strive to bring required reforms towards the payday market, you want to guarantee consumers gain access to small-dollar loans that assist them get ahead, perhaps not push them further behind.”

Pay day loans are usually referred to as method to bridge an income shortage between paychecks or other earnings. Also referred to as “cash improvements” or “check loans,” they’re usually costly, small-dollar loans, of generally speaking $500 or less. Continue reading “CFPB Finds Four Away Of Five Payday Advances Are Rolled Over Or Renewed”