The Pew Charitable Trusts recently released a study of payday loan rates across the country. While payday loans are exorbitantly expensive wherever they are allowed (15 states don’t allow them), a number of states have incredibly high average rates. Those states and their average interest rates on payday loans are:
- Idaho – 582%
- South Dakota and Wisconsin – 574%
- Nevada – 521%
- Delaware – 517%
- Utah – 474%
Notably, none of these states have laws that cap the amount of interest that payday loan lenders can charge. Rates in these states are often double those in states that do a better job of regulating the payday loan industry. (If these numbers aren’t sufficient to make you run the other way, read more about why you should avoid payday loans.)
Competition Does Not Bring Rates Down
The Pew study also found that competition does nothing to bring rates down. Those states with the highest rates also often had the highest number of payday loan storefronts.
To get information about the study results, check out the Pew Charitable Trust’s Fact Sheet: How State Rate Limits Affect Payday Loan Prices.