Payday loans typically have higher interest rates than cash advances

The costs and fees for a payday loan include a 'finance charge'

Payday lenders typically make money via finance charges, a percentage or dollar amount that the borrower owes the lender per $100 borrowed. While the finance charge can range from $10 to $30 for every $100 borrowed, this would equate to an annual percentage rate of almost 400 percent for a two-week loan.

Title loans are a type of short-term loan with high interest rates

Title loans allow borrowers to use their vehicle's title as collateral for a short-term loan. Similar to payday loans, title loans often have high interest rates and are mostly structured to last around 30 days. If title loans aren't repaid, the lender can take possession of the borrower's vehicle.

Some argue that advance payday apps aren't markedly different from payday loans

Some apps, like EarnIn, allow users to get money from their paycheck in advance. These apps access users' banking information, allowing the company to immediately take back any borrowed money and track users' financial situations to evaluate their risk. Unlike traditional payday lenders, these apps often waive the right to sue users who don't pay back the initial principal and don't charge interest, but rather ask users for a tip. (Some users may experience a paywall.)

Payday lenders usually require borrowers to post-date a check or provide access to an electronic bank account

If borrowers can't pay back the loan, they can be subject to overdraft fees from their bank and other fees from the payday lender—further exacerbating the debt borrowers face.

Modern payday lending came about in the late 1990s

In the early 1900s, unlicensed "salary lenders" used to give consumers one-week loans at annualized percentage rates of more than 100%. But wage garnishment and financially abusive practices led some states to create special licenses for lenders and implement rate caps to protect consumers. In the 1990s, a series of deregulations in various states opened the door for the modern payday lending industry to take off.

Banks have increased small loan programs since 2018, upping competition for payday lenders

One of the reasons payday lending flourished for nearly two decades is that most banks charged high overdraft fees and didn't offer small loans. However, since 2018, banks have increased their small loan options. Supporters say this provides safer alternatives for consumers, as banks are subject to more regulatory measures and are less likely to allow consumers to keep rolling over loans.

Payday lenders spent more than $5M on lobbying efforts in 2025

Payday lenders largely oppose rate cap policies, increased borrower risk-assessment requirements, and other regulations that would effectively shutter their industry. In 2025, the payday lending industry lobbied against interest rate limits on payday loan apps.

'Usury' is the act of lending money at an excessively high interest rate

Laws regulating predatory lending are called usury laws and vary from state to state. Payday lending has historically been exempt from some states' usury laws, and some lenders have found loopholes in state laws or business structures that allow them to provide short-term loans with high interest rates.

People who take out payday loans often know they are a bad deal

Despite common criticism that payday lenders take advantage of uninformed borrowers, some people who take out payday loans know they are usually a bad deal, but often feel like they don't have any other options. Payday loans are often considered a symptom of poverty. (Some users may experience a paywall.)

Houston, Texas depends heavily on payday loans

In 2024, people in Houston took out payday loans at a higher rate than the national average. In Texas, the average payday loan interest rate is 664%.

Tribal lenders have charged up to 600% APR on short-term loans

Some Native American tribes use their exemption from state legislation to bypass regulations on usury laws. Similar to payday lending, some tribal lenders have charged up to 600% APR on short-term loans.

Payday lenders are more highly concentrated in neighborhoods with high poverty rates

Research from the Federal Reserve Bank of Chicago shows that payday lenders in Illinois were more densely populated in zip codes with high poverty rates. The data also shows that payday lenders were more likely to cluster in zip codes where the highest percentage of residents are minorities.

Google banned ads for loans due within 60 days and interest rates exceeding 36% or higher

In 2016, Google said it would stop allowing payday lenders to advertise on the search engine. According to the company, this decision was made to protect users from deceptive and harmful financial products.

Buy now, pay later loans typically split payments into 4 installments

While they're marketed as "interest-free" loans, BNPL loans often have penalties for late payments, such as late fees in varying amounts depending on the BNPL company used to make the purchase. BNPL users often pay 25% of the BNPL loan at checkout, and then pay the remaining balance in three more installments over the course of roughly six weeks, depending on the BNPL company and agreement.

Military bases were once targets for payday loans and other predatory lending

The Military Lending Act of 2006—a federal law—capped the interest a lender can charge an active-duty soldier at 36% after the Department of Defense criticized payday lenders for targeting young soldiers with high-interest, short-term loans. However, many towns near military bases still have predatory businesses that critics say take advantage of army families living paycheck to paycheck. (Some readers may experience a paywall.)

Savings accounts earn more interest and limit monthly transactions

While the checking account is many people's primary daily account, savings accounts can earn customers more in interest, though access to these funds is generally more limited. Customers can earn several percent interest in savings accounts compared to near-zero checking account rates.

Find out ways to get lower rates on private loans, such as applying with a cosigner

More borrowers are being pushed to opt for private student loans as changes to federal borrowing caps and repayment plans are implemented. Private lenders typically advertise interest rates that fall anywhere between sub-3% and 15% or higher.

Direct lending typically involves 'senior loans'

Direct lending, the most common subtype of private credit, typically involves senior loans which are secured by a company's assets. "Junior capital," on the other hand, is a type of private credit that is not secured by a company's assets, making it generally riskier than direct lending.

Roughly 37% of first-time US home buyers have student debt

When those people have extra money, they might wonder: Is it better to pay down my mortgage or my student loans first? This article argues that the answer depends on each loan's interest rate, among other factors.

American Express charges merchants more than other card companies to accept AmEx, making Visa a more accessible option for many merchants.

Each card network charges merchants a discount rate, which is a fee merchants pay to accept cards. American Express charges higher discount fees than competitors like Visa and Mastercard as the business is more reliant on fees for operation.

A credit card’s grace period is a minimum of 21 days

Under federal law in the United States, an individual’s credit card payment due date must fall on the same day of each month, at least 21 days after the cardholder’s statement closing date.

Spot markets are where commodities intended for relatively immediate delivery are traded

Spot markets are where physical securities are exchanged for cash. Also known as cash markets or physical markets, the trades are relatively immediate—both parties agree to an immediate transfer. Currencies and securities can also be traded on spot markets.

While the Fed is involved in issuing new generations of cash, the way it adds to the money supply does not involve printers

The majority of money in circulation is credit, not cash. This credit, which acts similarly to direct deposit from employers, is added to bank accounts by the Federal Reserve. The Fed also employs tools like the federal funds rate and open market operations to expand or contract credit.

Urgent care is one step up from primary care

If a patient needs to see a provider today, urgent care can be a good solution. It has shorter wait times and a more affordable price tag than heading to the emergency room. Typically, an emergency department will have more specialists available for a serious and complicated issue, as well as advanced testing capabilities.

Life insurance policies and annuities are both contracts between individuals and insurance companies

But while life insurance policies are paid out only after an individual dies, annuities are intended to provide a steady income while the investor is still alive. Also, life insurance protects an investor's family in the event of their death, but an annuity helps protect an investor from outliving their retirement savings.

Roughly 43 million US borrowers owe roughly $1.7T in student debt, the second-largest source of consumer debt behind mortgages.

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