Payday Lending

Payday loans are small dollar, short-term loans that borrowers promise to repay from their next paycheck, giving the lender a check post-dated for their next payday. In Hawai‘i, lenders can charge 15% in fees on loans up to $600, with a maximum loan term of 32 days. At the end of the loan term, borrowers who cannot pay off the loan and the rest of their bills will often take out another loan to pay off the first and meet expenses.

The fees charged by lenders make it even more challenging for financially vulnerable borrowers to pay off their loans. Hawai‘i law currently allows a staggering 460% APR on a two week payday loan. SB 737 would protect Hawai‘i's consumers by imposing a 36% APR cap on all payday loans.

Appleseed is working with a coalition including Catholic Charities Hawai‘i, PHOCUSED, and many other community organizations to pass legislation with fair regulations on payday loans.

  • Learn more about how payday loans trap Hawai‘i residents.
  • Learn why Hawai‘i needs a 36% APR cap on payday loans.
  • Read a firsthand account of predatory payday lending by Veronica Teico of FACE Maui.

  • The Cycle of Payday Lending

    Payday Lending Cycle