2. What is the size of the payday loan industry in USA?

The size of the payday loan industry in USA is estimated to be around $46 billion. According to The Pew Charitable Trusts, around 12 million adults in America use payday loans every year. About 5.5% of adults from across the nation have taken a payday loan during the last 5 years.

About 3/4^th of the borrowers used storefront lenders and nearly 1/4^th of them borrowed online. According to state regulatory data, borrowers take out 8 payday loans per year. They spend around $520 on interest and the average size of a loan is $375.

The following 5 groups are more likely to have taken a USA payday advance:

1. Home renters
2. People who don’t have a 4-year college degree
3. African Americans
4. People who are divorced or separated
5. Those who earn less than $40,000 per year

Most of the borrowers use the loans to manage everyday living expenses. A big net reduction in the use of payday loans is seen in states that enact stringent legal protections.