The Cash Advance Loans Industry – Overview


[Payday Loan Statistic](

**Payday loans** are short term loans that are unsecured and are also referred to as payday advances or small dollar loans. **Payday loan services first emerged in the United States in early 1990s and since then started on a growth climb due to a number of reasons.** The financial service changes occurring in the marketplace at that time and the fact that there was a very powerful demand by consumers helped the trend.

The changes that took place in the financial service market and went on to become the basis for the growing trend of payday loans are:

* The high **rise in the costs** of overdraft protection fees, bounced checks, penalties that were put on late payments, and other such extensions of credit relating to short term borrowings.
* The continual trend of **regulations relating to the service** of payday advances that helped in the protection of consumers.

## The Cash Loan Industry Analysis

These days, payday loans are utilized for short-term borrowing needs in different communities all over America. An analysis of the industry has lead to the estimation that all over the United States, there are 20,600 payday loan locations that extend around $38.5 billion in credit relating to short term loans. These loans are utilized by working class citizens in 10 million houses who go through cash flow shortages.

**The payday advance industry also significantly contributes to the American and state economies who employ a number of more than 50,000 U.S. citizens** earning wages of $2 billion. This further leads to a generation of $2.6 billion and more in local, state, and federal taxes.

Because of the expansion and growth of the payday industry, Community Financial Services Association of America (CFSA) was founded so that the long run success of the industry could be ensured. More than half of the payday industry is represented by the [member companies of CFSA](

Some States Are Still Free To Set Their Own Interest Rates

Only a small number of 15 states cap the rates of interest that are charged by payday lenders, which means that a larger number of states are at liberty to charge **interest rates that can go up to a massive 300% to 400%.** The State Payday Loan Regulation and Usage Rates by Pew briefly highlight the payday lending laws of each state along with a mention of their usage rates.




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