JRLC Action Alerts

Stop the Payday Loan Debt Trap!


Payday loans are small-dollar, high-interest loans requiring full payback on the borrower’s next payday. They carry triple-digit annual interest rates, are due in full on a borrower’s next payday, require direct-debit access to a borrower’s bank account, and are made with little or no regard for a borrower’s ability to repay the loan. Because of these features, borrowers often cannot both repay the payday loan and meet their other obligations without having to quickly re-borrow, pulling them into a vicious debt trap.

In Minnesota, a typical payday loan is $380 and carries an APR of 273%, and is re-borrowed an average of TEN times (or twenty weeks) in a year. By the end of those twenty weeks, an individual will pay $397.90 in charges for a typical $380 payday loan. Payday loans don’t solve financial pressures; they make them worse.

CALL or WRITE YOUR LEGISLATORS and ask them to support payday lending reform! Key points:

  • More often than not, payday loans lead borrowers right into a debt trap
  • Stop the payday loan debt trap by capping the number of payday loans issued to a single borrower to four loans per year
  • Require payday lenders to use basic underwriting standards
  • Close the loophole that allows some lenders to evade our payday lending law

Want to learn more? Check out JRLC's fact sheets and issue paper on payday lending: