Sara Routhier, Managing Editor of Features and Outreach, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming worl...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Nov 29, 2011

Advertiser Disclosure

Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.

As a result of a new disclosure law in Utah, payday lenders were forced to disclose some previously hidden information from their books. According to the Salt Lake Tribune, Utah payday lenders say 99.9 percent of their loans are paid off before they reach their rollover limit of 10 weeks.

 

These payday loan lenders claim those numbers are evidence that their loans are not traps, but rather a needed and well-used service that the public as a whole benefits from.

 

Wendy Gibson, a regional manager for Check City and a spokeswoman for the Utah Consumer Loan Association of payday lenders, said “[That percentage] matches my experience with my customers and sounds about right. Almost everyone pays off their loans before reaching day 70. That shows we loan to people who can afford them,” as reported by the Salt Lake Tribune.

 

But critics are wary of those statistics.

 

According to Utah’s small-claims court records, payday lenders sue an average of 11,600 loan defaulters every year. If those lawsuits represent the 0.1 percent of loans not paid off, then that means payday lenders issue 11.6 million loans a year.

 

While Utah does not require the disclosure of the total annual number of payday loans issued, a payday lending report done in Washington State reveals that Washington’s payday lenders issued an average of 2,944,291 payday loans annually between 2000 and 2009—nowhere near the 11 million that Utah’s lenders claim.

 

To explain these numbers, Jerry Jaramillo, a supervisor at the Utah Department of Financial Institutions, said the disclosure law went into effect halfway through the year, so payday lenders’ computers may not have been set up to properly track their loans for a entire year.

 

He said “The real test will be what they report next year,” according to the Salt Lake Tribune.