Payday loans and health
The Kansans for Payday Loan Reform coalition is working toward extending pay back periods on these loans and capping repayment at 5% of a borrower’s paycheck. Such changes would help alleviate the toxic financial stress of over-indebtedness — and the resulting consequences on physical and mental health.
There is ample evidence connecting over-indebtedness and adverse effects on health outcomes. Think of the medical treatment and medications foregone when faced with demands of a payday lender. Now multiply that by the 175,000 Kansans who obtain payday loans each year. The average amount borrowed is $350 — and the average amount of interest and fees charged is $400. The average borrower signs up for a two-week loan but remains in debt for half the year.
These Kansans simply don’t access preventive health care; they can’t afford it. Their health problems compound along with the annual percentage rate of their loans. We believe curtailing the more egregious practices of the payday loan industry could help reduce cyclical poverty and health disparities.
Patrick Lowry (Community Care Network of Kansas), Topeka