Can Covid-19 cause a surge in payday loans?

Getting a payday loan already requires several things including a bank statement covering the last 30 days, your current account balance, a recent utility bill, driver’s license, a social security card, and several personal references, among other things in order to be approved for a loan.

Stricter approval policies may be put in place by lenders to make sure that you are still employed full time and have not been furloughed. This could mean limiting the amount you can borrow to minimize their losses if you don’t pay.

I can also see the pandemic forcing smaller payday lenders to close stores or implement layoffs. Several payday stores had already shut down due to the latest regulations that called for capping a borrower’s interest to 36% compared to the normal 350–500% that they typically charge.

You might also like: The Payday Loan Honor System

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