Slashing Interest Rates on Payday Loans

Nebraskans 18 and older say state legislators should strengthen consumer protections from payday lenders, a recent AARP survey found.

Nebraska is one of 38 states that allow payday lending. These small, short-term loans typically are due in full on the borrower’s next payday. Borrowers who can’t pay the balance must renew the loan—perhaps repeatedly, incurring additional fees each time. Under current state law, payday lenders can charge as much as 461 percent in interest annually.

More than two-thirds of survey respondents said the interest rate should be capped at 25 percent. AARP Nebraska is backing legislation that would cap the rate at 36 percent and would limit fees to 50 percent of the original loan amount.

For more information or to get involved, email Mark Intermill, AARP state advocacy director, at mintermill@aarp.org.