Pew Charitable Trusts held the research that showed that within the last five years 5.5% of adult Americans used payday loans nationwide. However, the rate among the residents of Oklahoma is the highest in the U.S. and comprises 13%.
These small personal loans which are made for a short term and secured against the next paycheck are usually provided with exorbitant interest rates and fees. Critics consider that payday loans are predatory while proponents claim that they are used by individuals who are unable to get traditional loans.
As a result of the study, the Pew researches discovered that the usage of these cash advances till payday is higher in urban areas comparing to suburban territories. Also it is higher in the South and Midwest regions. The main reason of such difference is the way payday loans are regulated in various states.
Following the study, nearly 75% of cash loan borrowers turned to storefront payday lenders while Oklahoma has about 400 of such locations. When it comes to small-dollar loans, Oklahoma is actually among 28 states which have permissive policies. These states allow single-repayment loans with APR of 391% or higher.
Being considered as one of eight “hybrid states”, Colorado legislation allows payday lending storefronts – where nearly 75% of applicants obtain such loans – though, perform more exacting requirements, like longer repayment periods, lower limits on fees or cash advance usage. Unlike Colorado, Arkansas is one of fifteen “restrictive states” which forbid such short-term loan storefronts.