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Lower-Income Households Shift Away From Payday Loans

WASHINGTON—Installment loans and online small-business lending are quickly replacing payday loans as sources of credit for lower-income households, driven by regulatory changes and innovations in financial technology, according to a new study.

Overall in 2018, such consumers in the U.S. spent $189 billion in fees and interest on financial products, ranging from pawn to subprime-auto loans, up 4% from 2017, according to Financial Health Network, a research group studying consumers underserved by banks and other traditional…