Payday loans, also known as short term loans, provide small loan amounts of $100-$1000 that are repaid within a short period of time, usually within 14-37 days. They charge fees of $10-$30 per $100 borrowed. There are approximately 25,000 payday loan storefronts in the US along with some online lenders. The total outstanding payday loan amount in the US is estimated to be around $2.2 billion. Some reasons credit unions are encouraged to offer short term loans include helping members avoid high fees of payday lenders and providing an alternative source of credit. Key aspects of short term loans include keeping loan amounts small and terms short to help borrowers avoid spiraling

1. The World of Payday Lenders
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2. What is a traditional Short Term Loan/Payday Loan?
Loan Amount: $100 -$1000
Loan Term: 4 days to 37 days (average 14 days)
Loan Fee: $10 to $30 per $100 borrowed
Typical Criteria: Must have a job and a paycheck
Must have a checking account
Limited Credit Check ,Most use sub prime industry
credit bureaus
Teletrack, CL Verify, Lend Protect
Do not use traditional FICO scoring
Loan amount typically based on a % of income
Financial Graduation Theory
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3. Payday Advance APR’s are often Lower than
Alternatives-Compare $100 Payday loan
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Short Term Loan Customer Profile & Facts
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4. Typical Payday Store Metrics
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5. Short Term Loan Metrics
Total US Marketplace
Store Fronts % Internet % Total
Est Number of Stores/Portfolios 25,000 98.2% 450 1.77% 25,450
Est Avg Outstanding per Store $ 69,000 $ 1,000,000 $ 85,462
Est Avg Total Outstandings $ 1,725,000,000 79% $ 450,000,000 21% $ 2,175,000,000
Est Avg Principal Written Annually $ 44,460,000,000 79% $ 11,818,481,013 21% $ 56,278,481,013
Average Fee Amt per Hundred $ 17.50 $ 27.50
Fee Income Written Annually $ 7,780,500,000 71% $ 3,250,082,279 29% $ 11,030,582,279
Average Loan Size 325 395
Est # of Transactions Annually 136,800,000 82% 29,920,205 18% 166,720,205
Illinois Payday Lending Facts
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6. 6 Reasons Credit Unions Should
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7. 6 Reasons Credit Unions Should
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8. 6 Reasons Credit Unions Should
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9. Key to Short Term Lending
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Key Take-A-Ways: Short Term Loans
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10. Closing
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