Last updated on February 18th, 2026 at 03:04 pm
The average payday loan in the US is around $375, often taken out for 2-4 weeks. The rates charged and amount you can borrow may vary from state to state depending on legislation surrounding price caps and the number of loans you can take out. Whilst most Americans use payday loan products for one-off emergencies, studies show that borrowers will use this product up to 8 times a year.
Key Points:
- The average payday loan is $375, typically paid back within two weeks.
- Over 12 million Americans use payday loans each year to help them get by.
- Some lenders only offer smaller loans, while some offer up to $35,000.
- When repaying a loan, you must also pay the interest added to it. This represents the cost of borrowing.
- As of 2025, 18 US states and D.C. either prohibit payday loans outright or effectively ban them through rate caps.
How Big is The Average Payday Loan?
Nationwide in the US, the average payday loan is $375, with a median of $350 according to CFPB data.
When paying back loans, it is not just the $375 that a borrower borrowed that needs paying back, as illustrated in our example:
Let’s say you borrow $375 for two weeks. The APR applied to your loan is about 391% — which is around the average going rate. The fee of $15 per $100 borrowed for two weeks translates to $56.25 in fees, and that is the cost of borrowing. Therefore you pay back your loan plus fees, which is $375 + $56.25. The total you owe is $431.25.
However, this amount is not representative of all states. While some states ban loans altogether, some allow them but have strict rules in place. For instance, California caps loans at $300, meaning you cannot borrow more than that as part of one loan.
Payday loans are high-interest, short-term loans which should only be used in urgent situations.
What Are The Average Payday Loans Used For?
Payday loans are there for urgent situations. If you are not desperate for cash, these are not for you. While they are quick, convenient, and pretty easy to get hold of, they are also expensive, stressful, and can damage your credit score – especially if you don’t pay them off on time.
That’s why most payday loan borrowers use their funds to cover emergency costs, such as covering:
- Medical bills
- Dental bills
- Veterinary bills
- Car or home repair
- Funerals
- Credit card bills
- Rent
However, research shows that 70% of payday loan borrowers actually use the money for regular recurring expenses like rent and utilities, rather than true emergencies. Payday loans should not be used to cover frivolous spending such as impulse buys and unnecessary subscriptions.
How Much Could I Borrow?
That will depend upon your credit history and the state where you reside, but you could be eligible to borrow up to $35,000.
Many states limit how much you can borrow, including Idaho ($1,000), California ($300), Alabama ($500), and Alaska ($500).
If you have a weaker credit history, you may not be approved for a large loan. That is why it is important – if you do have debt – to pay back your debts fully and on time, as otherwise your credit score will suffer, and it will be challenging to secure a loan in the future.
The amount you can borrow will depend upon state regulations. 18 states and D.C. now ban or effectively prohibit payday loans, including New York.
I Need More Than One Loan – Can I Take Out Two At Once?
Maybe. Some states limit how many loans you can have out at once, such as payday loans in Ohio (1), California (1), and Texas (2). If your state allows you to take out multiple loans at once, and you have a means of paying them back, there is no reason as to why you would not be able to take out more than one loan at one time.
Some independent lenders may not allow you to take out multiple loans with them. If this is the case, you will need to approach another lender.
