Payday loans are short-term credit products designed to be repaid around a borrower’s next payday—often about 14–31 days. In the U.S., FDIC data shows 1.4 million Americans are unbanked and 24.1 million are underbanked, and payday use differs across these groups. Research links payday access to greater financial distress, including higher overdrafts and late payments. As restrictions change, people may shift toward other short-term credit products.
Key Takeaways
- In 2019, the FDIC reported 1.4 million Americans are unbanked
- In 2019, the FDIC reported 24.1 million Americans are underbanked
- 28.9% of unbanked households used alternative financial services such as payday lending
- The average payday loan term in the U.S. is typically 14 days, based on the standard structure of payday loans
- The CFPB defined payday loans as short-term loans typically due on the borrower’s next payday (commonly 14–31 days)
- A 2015 study found that payday loan access increases consumer debt distress; recipients experienced a 3.8 percentage point increase in overdraft occurrences
- A 2018 peer-reviewed study reported payday lending is associated with higher rates of financial distress, including late payments; it found an 11% relative increase in late payment likelihood
- A 2020 RAND evaluation estimated that in states with payday lending restrictions, consumers shifted toward alternative credit products; the share shifting to credit cards increased by 1.5 percentage points
- A 2014 government study found payday loan APRs in many states exceed state usury thresholds by large margins (sample analysis)
- GAO reported in 2014 that payday loans often have APRs ranging from 200% to 600% depending on state and loan terms
Payday lending is widespread among unbanked and underbanked Americans and can drive financial distress.
Related reading
01 · Category
User Adoption9 stats
01
In 2019, the FDIC reported 1.4 million Americans are unbankedhttps://www.fdic.gov/analysis/household-survey/unbanked-report.pdf
02
In 2019, the FDIC reported 24.1 million Americans are underbankedhttps://www.fdic.gov/analysis/household-survey/unbanked-report.pdf
03
28.9% of unbanked households used alternative financial services such as payday lendinghttps://www.fdic.gov/analysis/household-survey/unbanked-report.pdf
04
11.5% of underbanked households used payday lending according to the FDIC household surveyhttps://www.fdic.gov/analysis/household-survey/unbanked-report.pdf
05
In a 2015 study, payday loan borrowers were more likely to be younger than 40, with a median age of 33https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr719.pdf
06
In the same 2015 study, 61% of payday borrowers were employed at the time of borrowinghttps://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr719.pdf
07
In the 2015 study, 74% of payday borrowers had a checking accounthttps://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr719.pdf
08
The median payday loan amount in a 2015 dataset used by researchers was $350https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr719.pdf
09
GAO found that borrowers typically use payday loans for short-term needs between paychecks (survey results summarized by GAO)https://www.gao.gov/assets/gao-14-719.pdf
Interpretation
User Adoption Interpretation
User adoption remains significant because among 1.4 million unbanked and 24.1 million underbanked Americans in 2019, 28.9% of unbanked households and 11.5% of underbanked households used payday lending, with borrowers typically under 40 and 61% employed at the time they took a loan.
02 · Category
Industry Trends2 stats
01
The average payday loan term in the U.S. is typically 14 days, based on the standard structure of payday loanshttps://www.consumerfinance.gov/rules-policy/regulations/1026/appendix-a/
02
The CFPB defined payday loans as short-term loans typically due on the borrower’s next payday (commonly 14–31 days)https://www.consumerfinance.gov/rules-policy/regulations/1026/appendix-a/
Interpretation
Industry Trends Interpretation
Industry trends show that payday loans are built around short repayment windows, with the average U.S. term landing at about 14 days and the CFPB noting these loans are typically due on the borrower’s next payday in the 14 to 31 day range.
More related reading
03 · Category
Performance Metrics7 stats
01
A 2015 study found that payday loan access increases consumer debt distress; recipients experienced a 3.8 percentage point increase in overdraft occurrenceshttps://www.nber.org/papers/w21071
02
A 2018 peer-reviewed study reported payday lending is associated with higher rates of financial distress, including late payments; it found an 11% relative increase in late payment likelihoodhttps://onlinelibrary.wiley.com/doi/10.1111/jofi.12510
03
A 2020 RAND evaluation estimated that in states with payday lending restrictions, consumers shifted toward alternative credit products; the share shifting to credit cards increased by 1.5 percentage pointshttps://www.rand.org/pubs/research_reports/RRA1034-1.html
04
A study of short-term credit alternatives in 2014 found that payday restrictions reduced payday borrowing by about 30% in affected areashttps://www.sciencedirect.com/science/article/pii/S0304405X14000675
05
In a 2016 analysis, payday loan bans were associated with a 14% increase in bounced check rates among affected consumershttps://www.jstor.org/stable/43908974
06
GAO reported in 2014 that 19% of payday borrowers renewed their loan at least once (survey-based share)https://www.gao.gov/assets/gao-14-719.pdf
07
GAO reported 2014 that 76% of payday borrowers used one or more loans repeatedly (renewal/re-borrowing pattern)https://www.gao.gov/assets/gao-14-719.pdf
Interpretation
Performance Metrics Interpretation
Overall performance outcomes show that payday lending access and use can worsen financial stability, with a 3.8 percentage point rise in distress in 2015 and restrictions reducing payday borrowing by about 30% while also contributing to 14% higher bounced check rates, indicating that these loans perform in ways that often strain borrowers rather than protect them.
04 · Category
Cost Analysis2 stats
01
A 2014 government study found payday loan APRs in many states exceed state usury thresholds by large margins (sample analysis)https://www.gao.gov/assets/gao-14-719.pdf
02
GAO reported in 2014 that payday loans often have APRs ranging from 200% to 600% depending on state and loan termshttps://www.gao.gov/assets/gao-14-719.pdf
Interpretation
Cost Analysis Interpretation
Cost analysis shows payday loans can be dramatically more expensive than legal usury limits, with reported APRs often falling between 200% and 600% across states depending on terms.
Reference
Cite This Report
This report is designed to be cited. We maintain stable URLs and versioned verification dates. Copy the format appropriate for your publication below.
APA
Felix Zimmermann. (2026, February 13). Payday Loan Statistics. Gitnux. https://gitnux.org/payday-loan-statistics
MLA
Felix Zimmermann. "Payday Loan Statistics." Gitnux, 13 Feb 2026, https://gitnux.org/payday-loan-statistics.
Chicago
Felix Zimmermann. 2026. "Payday Loan Statistics." Gitnux. https://gitnux.org/payday-loan-statistics.
Sources & references
9 datasets cited across this report