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Payday Lending . The main focus associated with analyses is loan sequences, the series of loans borrowers usually sign up for after a loan that is new.

33 Pages Posted: 13 Nov 2018

Kathleen Burke

Customer Financial Protection Bureau

Jesse Leary

Jonathan Lanning

Customer Financial Protection Bureau

Jialan Wang

University of Illinois at Urbana-Champaign – Department of Finance

Date Written: March 1, 2014

Abstract

In this information Point we present the results of a few analyses of customers??™ use of pay day loans.

Key findings of the report consist of:

??? Over 80% of payday advances are rolled over or accompanied by another loan within 2 weeks (i.e., renewed). Same-day renewals are less regular in states with mandated cooling-off durations, but 14-day renewal prices in states with cooling-off durations are nearly just like states without these limits. We define loan series as a number of loans applied for within 2 weeks of payment of a loan that is prior.

??? even though many loan sequences end quickly, 15% of the latest loans are followed closely by a loan series at the least 10 loans very long. 1 / 2 of all loans come in a sequence at the very least 10 loans long. More…