Most Payday Loans Go to Those With Old Payday Debts

Payday loans, in theory at least, provide a solution to a problem in the market: Borrowers sometimes need small, short-term loans to pay for unexpected expenses. Car repair is the time-honored example often cited in these discussions. But a new report from the Consumer Financial Protection Bureau finds that, in practice, most borrowers aren’t in sudden jams. Instead, payday borrowers typically end up rolling old debts into new loans, often increasing how much they owe each time.

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