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The state data currently say 25.6 percent of Utah payday-loan customers enter into long-term repayment plans — but that is an error and should instead be about 5.8 percent, although that must still be verified, said Paul Allred, deputy commissioner of the Department of Financial Institutions.
Pignanelli had questioned the original figure, and the department found that one lender had been confused and submitted incorrect data that inflated numbers, Allred said. He said the state will likely amend its report next week.
Utah payday loans, by the numbers
Average annual percentage rate charged » 473.52%
Highest interest charged by a payday lender » 1,564%
Average time a customer takes to pay off a loan » 33 days
Average loan amount » $358
Number of payday-loan stores in Utah: 565
Source: Utah Department of Financial Institutions
State law allows customers once a year to stop interest on their loans to allow paying them back without interest over 60 days. Hilton says that use of such extended payment plans again show that many cannot afford the loans and feel trapped.
New data also show that 2,939 people used a provision in state law allowing them to cancel a payday loan within 24 hours without penalty. Hilton hailed that as "wonderful. It shows we are starting to have a more educated consumer who understands how bad payday loans are for them and their family’s budget."
Pignanelli said the 24-hour cancellation option — plus allowing customers the option to stop interest and work out extended-payment plans — demonstrates that payday lenders are responsible and well regulated.
"No other financial service, like a bank or credit union," offers the ability for a customer to "walk in and say, ‘I need to stop interest and need to pay this down over the next 60 days,’ " Pignanelli said. "It is a great service that is available."
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