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More Seniors Turning to Payday Loans, Study Finds

by Ken Anderson | Apr 02, 2013
Many senior citizens in the U.S. it seems are turning to payday loans to help them get by each month. The latest study from the Center for Responsible Lending (center) finds that more than 25 percent of bank payday loan borrowers are Social Security recipients.

Many senior citizens in the U.S. it seems are turning to payday loans to help them get by each month.  The latest study from the Center for Responsible Lending (center) finds that more than 25 percent of bank payday loan borrowers are Social Security recipients.

Among other things, the 15-page report finds:

  • Bank payday loans carry an annual percentage rate (APR) that averages 225 to 300 percent.
  • The median bank payday borrower took out 13.5 loans in 2011 and spent at least part of six months during the year in bank payday debt.
  •  Over a third of borrowers took out more than 20 loans, bringing the mean number of loans per borrower to 19.
  • Bank payday borrowers were two times more likely to incur overdraft fees than bank customers as a whole.
  • One of every four payday borrowers is a senior citizen receiving Social Security.