Will Small Dollar Loans from Banks Put Payday Lenders Out of Business

Four major banks now offer low-cost, short-term loans

Andy Spears
3 min readDec 11, 2022
Photo by Precondo CA on Unsplash

The payday lending industry capitalizes on the need to access short-term cash quickly — usually for an emergency or unplanned expense. Most major banks don’t offer these types of products — loans for $500 or less — because the cost to issue and service these loans outweighs the revenue.

One survey suggests that more than 1/3 of Americans have signed up for some type of payday lending app — like Dave.

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These app-based lenders — Dave, MoneyLion, SoLo Funds — offer convenience that often comes at a high cost. That is, interest rates well into the triple digits.

Then, of course, there are the traditional storefront payday lenders — companies like SpeedyCash, Check into Cash, Advance America, and others.



Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .