1/6 Utah cash advance stores left the lending business last year as greater number of borrowers began to use new services to get out of high-interest loan debt.This is one of results of new regulations in the state. The new Utah law aims at protecting consumers from expensive cash advance and is hoped to help them not to get into debt. 


  • Payday Loans $100 - $1,000
  • Personal Loans $1,000 - $35,000

The main reasons why Payday Loan staores are closing down in Utah:

  • The rise of average rates up to 485% in comparison with 459.14% last year;
  • Low repayment ability of most Utah borrowers who failed to pay off the loan even within the maximum-allowed 10-week rollover period, the number of such loans increased by 3.6% which is $492,160 in dollar value;
  • 3.35% loans were filed to court for default;
  • The maximum APR in Utah is 1,407.86%

Rep. Brad Daw, R-Orem, says “We may be helping consumers a little bit. If our studies show anything, it is that far too many people get trapped by these loans and don’t know there is a way out. This shows that more are finding the off-ramps that we have created.”2

The reform makes payday lenders offer an extended repayment plan without any additional fees before considering the loan defaulted. In Utah renewals of a Payday Loan may last up to 10 weeks though usually a short-term cash advance is to be paid off in 14-30 days. According to critics, these rollovers aimed at paying for the previous loan lead to endless cycle debt in future.

Utah Payday Loan stores close.

According to the latest research, there are 462 payday loan stores in Utah comparing with 553 last year. The number is still high, even higher than Subway, McDonald’s, Burger King and Wendy’s restaurants combined. But the tendency states closing 1 of every 6 payday cash advance stores in Utah.

Why do Payday lenders close their business in Utah?

“Because Utah has high rate of competition in sphere of short-term lending”, says Wendy Gibson, spokeswoman for the industry’s Utah Consumer Lending Association.3

The following figures prove that payday lending has a very competitive character:

  • Utah has 50 payday loan in-store companies,
  • 32 online lenders,
  • 61 title loan companies.

High interest rates for Payday Loans in Utah.

The APR for Payday Loans in Utah increased up to 484.74 since the last year which is 25% higher. According to the state’s legislation the lenders must state the interest they are going to charge. But it doesn’t show the real cost of the loan.

Gibson says, “ This APR measures interest for an entire year,” while “payday lenders can only charge interest for 10 weeks and the average length of a loan is 31 days.”

If you borrow $100 at 484.74$ rate it will cost you $9.30 per week which might be even cheaper than other small-dollar short-term alternatives.

But lenders in Utah can be not very responsible and are likely to charge you much more as they may take a flat fee regardless of loan duration.

So no matter how quick you pay back the loan, it is not going to save you any money.

PayDay Loan Calculator

Select the amount for the loan you want in order to get the principal, which is the basis that we use to calculate the interest and the total cost of the cash advance.
The number of days within that you will be ready to repay the loan. It’s used to count the total cost of cash advance by multiplying the days by the amount of interest.
To calculate the total cost of your loan, we take the minimal average APR legal in all States, which is 36%. This figure is only a representative, providing you with general information on how much the loan may cost. To find out a more accurate total, fill in the Annual Percentage Rate required by the lender you want to apply to.
It’s the money charged by the lender for doing all the necessary paper work, bank transactions, etc., connected with lending you the money.
$ Your loan
+ $ Your fee
= $ Total Cost*

* Total Cost - The sum of money you are to pay off within the term you’ve chosen if you borrow the stated above amount for the average (or required by your lender) APR.

All the calculations are provided as guides only. They don’t guarantee 100% the same cost you are going to be charged but they do help you understand the overpay much better. Unless you change the APR, the calculations will be based on the average or lowest rate represented by most lenders for each loan type. You’ll find the accurate interest rate as well as the real cost of your cash advance after you get approved before you sign the agreement. It will depend on many factors including the amount, the term of the loan, your credit score and the lender’s conditions. Interest rates are not fixed figures and are subject to change at any time. As soon as you fill out an application and get approved all the details concerning the rates and terms will be sent to you.

Are Payday Loans really debt traps?

Critics call the loans debt traps. This reputation is due to the business model lenders follow. They earn money when customers can’t pay back on time. As they default a loan they start being charged additional fees and higher interest which makes it difficult to escape the debt.

And such ridiculous rates are possible due to Utah regulation system that doesn’t cap the interest.

The latest report provides the customers with other data proving that unaffordable Payday Loans may lead you to a cycle of debt:

  • 45,114 payday loans were defaulted in comparison with 43,564 the previous year,
  • 3.35% of payday cash advance in Utah end up in lawsuits filed by lenders against borrowers for default.

Gibson noted that means “nearly 97 percent of loan agreements are fulfilled” and that “consumers are well protected and satisfied with payday loans.”

How to escape Payday Loan debt?

  • Lenders should provide borrowers withan extended payment plan at no interest.
  • Gibson said the extended payment plans are “the exact solution consumers needed for an effective method for loan repayment”.
  • Borrowers with buyers’ remorse should be allowed to rescind new loans quickly at no cost, and not be stuck with their high interest.
  • Taking out new loans to pay off old ones should be prohibited. Consumers apply for extension plans because they are afraid of
  • lawsuits and high attorney fees. But they don’t realize that it will cause even higher rates and more debt.

Though all these rules set by the new law aim at helping people manage their debt not all customers obey them. They are still applying for high-cost payday loans and then come to nonprofit organizations to seek help.

There are a lot of examples of people who have 10 payday loans and use them to pay for everyday expenses. Such borrowers are never going to get out from under this debt.

It’s understandable why customers apply for payday loans. When you need to pay the electric bill or feed your kid or get diapers, there is not much choice to find the necessary funds, especially if you have bad credit. Besides, people are used to it, they inherited this habit from their parents, and they get little education in this financial sphere.

More Payday Loan regulations coming in Utah.

While the existing laws do their best to protect the borrowers, there is still much to be done. First of all, interest rates must be capped. Financial experts also recommend to limit access to Payday loans among irresponsible consumers, or those who can’t afford paying off such loans.

32% of all payday loan borrowers are “chronic” users of the service and another 14% have experienced default.

The Consumer Financial Protection Bureau4 last year issued rules, to take effect in 2019, that would require payday lenders to make sure borrowers could afford to pay off a new loan and still meet basic living expenses. It is also going to limit the number of consequent Payday loans to three.

However there are still a lot of debates and disagreements between President Donald Trump’s new appointee and members of Congress.

That’s why Utah political leaders are very skeptical to more changes in payday lending. Too much money is donated to the state from this industry ($127,950 was given to Utah politicians in 2016 from lenders).