How many Americans use payday loans each year
11 Min Read
Reviewed by Michael Lefler The figure cited for over a decade is about 12 million Americans a year. A more recent federal survey puts it at roughly 4.7% of households in 2023. Both can be true at once, because they count different things, and neither is the same as the number of loans, which runs far higher because most borrowers take more than one.
Why It Matters
At first glance, the answer to the question is straightforward and can fit into one sentence. But the bare figure of 12 million people using payday loans does not really tell the story. When we compare the number of borrowers with the percentage of households and the number of loans, we see that people often take out several payday loans within a year.
This re-borrowing pattern is quite alarming. Many states still do not strictly regulate payday loans, which is why residents face very high APRs that can reach 780%. In high-interest states, lenders can make around $2.4 billion in fees in a single year. Repeated borrowing puts even more strain on vulnerable households, exposing borrowers to financial emergencies and unexpected expenses that drive them deeper into debt.
1F Cash Advance analyzed consumer behavior over recent years to document this re-borrowing trend and understand how much returning borrowers paid in fees over a year. Our goal with this research is to give people a clearer, more complete picture of what payday loan use actually looks like in practice — so they can make more informed choices if they ever need this kind of credit.
Executive Summary
The most widely cited answer is that roughly 12 million Americans use a payday loan each year, a figure from the Pew Charitable Trusts’ national research and repeated by the Federal Reserve Bank of St. Louis.1,5 Pew’s survey also found that 5.5% of adults had used a payday loan within a five-year window.1 A more recent and differently measured figure comes from the CFPB’s Making Ends Meet survey, which found that about 4.7% of U.S. households used a payday, pawn, or auto-title loan in 2023, up slightly from 4.6% in 2022.3
These numbers are not in conflict; they count different units over different windows. The crucial distinction is between people and loans. Because the typical borrower takes about eight loans a year, the count of loans is far larger than the count of borrowers: the Center for Responsible Lending found more than 20 million payday loans in high-cost states alone in 2022.1,6 The number of Americans using payday loans has also drifted down as states have capped rates, with the product now operating in 32 states, down from more than 40 two decades ago.2
Our Research Approach
This analysis was developed by the 1F Cash Advance research team. We approached this from three angles: people, households, and the number of loans issued each year. This information was collected using only non-commercial data. Here’s what was considered during the study:
- Borrowing data across different units. Researchers counted individual borrowers, households, and loans separately to track patterns of re-borrowing. To do that, they reviewed Pew Charitable Trusts’ national payday borrower research, the CFPB’s Making Ends Meet survey, and the Federal Reserve’s work on household financial health.
- Regulatory records. The 1F Cash Advance team relied on primary, non-commercial sources, such as Pew for borrower estimates and demographics, the CFPB for household-level data, the Center for Responsible Lending for loan volumes and fee burdens, and California DFPI’s regulatory reports to provide accurate and unbiased information.
- Trends. Our experts compared earlier national benchmarks with newer survey results and state regulatory data to show how payday loan use and numbers have changed as more states adopt rate caps.
- Who is more affected? Demographic information from Pew, the Federal Reserve, and the CFPB was analyzed to find out which groups are more likely to use payday loans, so the statistics provide a clearer picture of who is exposed to high-interest debt.
Methodology and Sources
Usage figures come from non-commercial primary sources: the Pew Charitable Trusts’ nationally representative payday borrower survey, the Consumer Financial Protection Bureau’s Making Ends Meet survey (built on a national credit-bureau panel), the Federal Reserve’s research and its Survey of Household Economics and Decisionmaking, the Center for Responsible Lending’s analysis of state regulator data, and the California Department of Financial Protection and Innovation’s annual filings. Different sources measure different things: number of borrowers per year, share of adults or households, and number of loans. Each figure is labeled by what it counts and over what period. The foundational Pew “12 million” estimate reflects 2010 data and remains the standing reference for annual borrower counts; it is dated accordingly, with newer household-share figures shown alongside. Every figure carries a non-commercial citation.
People vs Loans: The Distinction That Resolves the Numbers
A single answer to “how many” hides three different questions. Separating them clears up the apparent contradictions.
| Measure | Figure | What it counts |
|---|---|---|
| Borrowers per year | ~12 million | People, one year1 |
| Households in 2023 | 4.7% | Share of households, one year3 |
| Adults over 5 years | 5.5% | Share of adults, five years1 |
| Loans in high-cost states | 20 million+ | Loans, one year (2022)6 |
The 12 million figure counts people who take at least one payday loan in a year.1 The CFPB’s 4.7% counts the share of households reporting use in a single year, a measure that includes pawn and auto-title alongside payday and rests on a national credit-bureau panel.3 Pew’s 5.5% counts adults who used the product at any point in a five-year span, so it is naturally higher than a one-year rate but spread over more time.1
The loan count is the largest number and the most misread. Because the average borrower takes about eight loans a year, the number of loans dwarfs the number of borrowers: the Center for Responsible Lending counted more than 20 million payday loans worth about $8.6 billion in high-cost states in 2022, generating roughly $2.4 billion in fees.1,6 Reporting that figure as “20 million Americans” would double-count the many borrowers who appear several times.
The Trend: Fewer Users as Rate Caps Spread
The annual count has not held flat at 12 million. It has been pulled down by state policy and a shift online.
The “12 million” benchmark reflects 2010 data, the most recent year for which Pew had substantial figures at the time.1 Since then the storefront footprint has shrunk: the number of states with active payday lending fell to 32, down from 36 in 2014 and more than 40 in the mid-2000s, as states adopted 36% rate caps that close the product down.2 California’s regulator shows the scale of the decline within one state: the number of payday loans fell from more than 12 million in 2015 to about 5.8 million in 2024, and individual borrowers dropped from roughly 1.9 million to about 889,000 over the same period.7
At the same time, the CFPB’s household measure shows usage holding roughly level recently, at 4.7% of households in 2023 against 4.6% in 2022, after pandemic relief had temporarily reduced reliance on high-cost credit.3 The picture is a long, policy-driven decline in storefront borrowing, with a recent flattening as relief faded and household financial strain rose again.3
Who the Users Are
The annual user base is not a cross-section of the country; it skews toward specific groups.
Pew’s survey found the typical payday borrower is most often white, female, and 25 to 44 years old, but the groups with the highest odds of use are people without a four-year degree, home renters, Black Americans, those earning under $40,000, and people who are separated or divorced.1 Income matters but is not the whole story: Pew noted that higher-income renters can be more likely to borrow than lower-income homeowners, so housing status and other factors weigh alongside income.1
The Federal Reserve’s household survey points the same way, finding high-cost alternative credit concentrated among lower-income adults and those with thin access to mainstream credit.4 The CFPB adds that access to mainstream credit remains hardest for Black and Hispanic consumers, the same groups over-represented among payday users, which is why the annual user count is concentrated rather than evenly spread.3
All payday borrowers have a bank account. A common misconception is that payday users are unbanked. Lenders require a checking account as a condition of the loan, so the roughly 12 million annual users are banked people who turn to payday credit anyway, and about 8 in 10 said they would borrow from their bank instead if it were an option.2
The Count in One View
Borrowers, households, and loans, side by side with what each one means.
| Figure | Value | Source basis |
|---|---|---|
| Borrowers per year (national) | ~12 million | Pew, 2010 data1 |
| Households using in 2023 | 4.7% | CFPB Making Ends Meet3 |
| Adults using over 5 years | 5.5% | Pew survey1 |
| Loans, high-cost states, 2022 | 20 million+ | CRL6 |
| States with active payday lending | 32 | Pew, down from 40+2 |
| California borrowers, 2024 | ~889,000 | California DFPI7 |
The honest answer to “how many Americans use payday loans each year” is about 12 million people, or roughly 1 in 20 adults, with a recent federal survey putting current household use near 4.7%. The much larger numbers in circulation, like 20 million, count loans rather than people and reflect the fact that borrowers return repeatedly. The trend is downward as rate caps spread, but for the people who use them, the defining feature is not borrowing once; it is borrowing again.
Sources
- 1 The Pew Charitable Trusts, Payday Lending in America: Who Borrows, Where They Borrow, and Why, 2012 (~12 million borrowers per year using 2010 data; 5.5% of adults over five years; 8 loans per year; borrower demographics).
- 2 The Pew Charitable Trusts, Payday Loans and Overdraft: A Short History and What’s Next, 2023 (12 million continue to use payday loans annually; product now in 32 states, down from 40+; all borrowers have a checking account; 8 in 10 would prefer to borrow from their bank).
- 3 Consumer Financial Protection Bureau, Making Ends Meet in 2023, Dec. 2023 (~4.7% of households used a payday, pawn, or auto-title loan in 2023, up from 4.6% in 2022; survey on national credit-bureau panel; access to credit hardest for Black and Hispanic consumers).
- 4 Board of Governors of the Federal Reserve System, Economic Well-Being of U.S. Households (SHED) (use of high-cost alternative financial services concentrated among lower-income adults and those with limited mainstream credit access).
- 5 Federal Reserve Bank of St. Louis, Fast Cash and Payday Loans (as many as 12 million Americans use payday loans each year; 14,348 storefronts in 2017; 7 in 10 borrow for basic expenses).
- 6 Center for Responsible Lending, Down the Drain: Payday Lenders Take Billions in Fees, Feb. 2025 (more than 20 million payday loans worth ~$8.6 billion in high-cost states in 2022, generating ~$2.4 billion in fees; figures count loans, not borrowers).
- 7 California Department of Financial Protection and Innovation, Annual Report of Payday Lending Activity Under the CDDTL, 2024, July 2025 (~889,000 individual borrowers and 5.8 million loans in 2024, down from ~1.9 million borrowers and 12 million loans in 2015).
Report generated June 2026. Figures are sourced as cited and dated; confirm current data before acting on it. Sources measure different units — borrowers per year, share of adults or households, and number of loans — and are labeled accordingly. The foundational “12 million” estimate reflects 2010 data and is used as the standing benchmark for annual borrower counts, with newer household-share figures shown alongside.
