Payday Loans in Miami, Florida: Subprime Report
- Nickname: "Magic City"
- Population: 5,502,379
- Website: MiamiGov.com
The Miami metropolitan region is home to about 5.5 million residents, making it the fourth largest city and the eighth most populated area in the United States. Miami is a global city, which brings people from all over the world to experience its sandy beaches, Latin flavors, and urban multiculturalism.
Unfortunately, Miami’s unemployment rate is 4.4%, which is on the higher side when compared with Florida’s average of 3.9%. In addition, the city’s poverty rate is a stunning 27.6%, much higher than the U.S. poverty rate of 12.7% and even Florida’s rate of 16.1%. So people in Miami are getting jobs at a higher rate than in some other U.S. cities, but there is still a high rate of residents who are going without work and a notable percentage of residents who are living in poverty.
People living in Miami are also more likely to struggle financially compared to those living in the rest of the state, because of their credit card bills and various debts. Miami residents carry, on average, credit card balances of $4,511, non-mortgage debts of $35,481, and mortgage debts of $155,647. What does this tell us? That people living in Miami are likely to have a lot of debt to pay off, and that many Miami residents may not have the income to fully pay all of their bills in the foreseeable future.
Average Number of Credit Cards:
Average Balances on Credit Cards:
Average Number of Retail Cards:
Average Non-Mortgage Debt:
Average Mortgage Debt:
Average Retail Debt:
90 Plus Days Past Due Delinquency:
Miami/Fort Lauderdale Region
Payday Loans in Miami
People living in Miami who are struggling financially may be tempted to turn to predatory or subprime lenders to help solve their money problems. Unfortunately, these types of loans often leave desperate, well-meaning people in a cycle of seemingly never-ending debt.
According to Debt.org, predatory lending can be defined as “any lending practice that imposes unfair or abusive loan terms on a borrower. It is also any practice that convinces a borrower to accept unfair terms through deceptive, coercive, exploitative or unscrupulous actions for a loan that a borrower doesn’t need, doesn’t want or can’t afford.”
Predatory loans are bad news for borrowers. And people and policy makers in Miami know this. In fact, the city fought for (and won!) the right to sue large financial institutions over predatory practices that leaders blame for a slew of foreclosures that had devastating impacts on Miami’s tax base in the late 2000s. You can learn more about that case here.
What is a Payday Loan?
Payday loans are one type of predatory lending practice that can wreak havoc for borrowers. Payday loans are enticing to many because they seem to offer an easy solution to common financial problems. But what may seem like a miracle cure often leads to devastating consequences for the people who depend on payday loans to help make ends meet. You might think you know exactly what payday loans are, but it’s worth taking time to make sure you know all of the facts before borrowing.
Payday loans are often represented as a quick and easy solution to unforeseen financial emergencies. And here’s how it goes:
1. The borrower needs money
2. The lender provides the loan
3. In return for the loan, the borrower agrees to:
- use their future paycheck as collateral
- pay extremely high interest rates
- pay high fees
- provide the lender with their bank account information
Why Should You Avoid Payday Lenders in Miami?
While payday loans may get borrowers with bad credit or no credit out of immediately pressing financial needs, once initiated, these loans can begin a long cycle of borrowing, re-borrowing and re-borrowing again. This is because payday lenders impose APR rates and fees that are difficult for borrowers to pay back in the short amount of time allotted, causing them to need to borrow even more to pay off the initial loan. When borrowers aren’t able to repay their loans, payday lenders may offer to extend the original loan – with even more fees. The more they extend and refinance the original payday loan, the more money they end up paying overall.
Local Financial Resources for Miami Residents
Most of us have experienced a time in our lives when money has been tight. Things happen, and we’re not always able to control our circumstances. Spending and debt can easily get away from us, and borrowing money may be a necessity. This is not hard to understand when you consider all of the expenses that most of us have to contend with on a daily basis. From healthcare to food to rent or paying the mortgage, things can sometimes be too much to keep up with.
Florida recently increased its minimum wage by 1.85%, up to $8.25 in 2018 (which, if you can believe it, is actually higher than 23 other states), people working in Miami may start to see a slight positive impact on their pocketbooks. But $8.25/hour is still difficult to live on, especially in Miami where residents spend an average of nearly $50,000 a year on household expenses. This includes nearly $16,000 for housing, nearly $4,000 for healthcare, and over $6,000 for food (dining out + food consumed at home). With expenses like these, many Miami residents may feel the need to turn to predatory lenders for relief. However, there are resources in Miami that can help reduce Miami residents’ expenses and improve their financial situations without having to turn to predatory lending.
Total Consumer Expenditures per Household
Apparel & Services
Food Consumed at Home
Life and Other Insurance
Pensions and Social Security
Healthcare Resources in Miami
Healthcare represents an area of often overwhelming expenses and debt, especially within the state of Florida and Miami-Dade County. According to 2014 figures, the state of Florida spends just over $8,000 per capita annually on healthcare. As noted above, Miami residents spend, on average, nearly $4,000 on their healthcare every year.
Florida is one of 19 states that have not expanded Medicaid, which has left nearly a million people in the state without insurance. As of 2016, 13% of Florida’s population was uninsured, and Miami-Dade County is home to the largest uninsured population (18%) within the state of Florida.
As of 2016, about 17% of adults in Miami-Dade County have past due medical debt that has gone to collections, which total, on average, $678.
Fortunately, there are many resources in Miami to help residents with the rising and often unmanageable cost of healthcare. Florida has more than 100 free and low-cost clinics that help provide healthcare services at little or no cost to low-income, uninsured, and underserved individuals. This is more than any other state in the country. The Florida Association of Free and Charitable Clinics (FAFCC) is a Miami-based, non-profit organization that supports many of these clinics.
The Florida Department of Health website also provides a list of free or reduced cost clinics, including:
Borinquen Health Care Center
3601 Federal Highway
North Miami, FL 33137
Jessie Trice Community Health Center (JTCHC)
5361 NW 22nd Ave
Miami, Florida 33142
Food Assistance in Miami
Food insecurity – being without reliable access to a sufficient quantity of affordable, nutritious food – affects nearly 20% of people in Miami. It is particularly prevalent among seniors, single parent households, and those facing financial challenges.
If you don’t have the funds to cover food expenses for you or your family, there are many food banks, soup kitchens, and other non-profit organizations that offer free groceries and food for people and families in need. Additionally, many of these centers provide other types of assistance, including counseling, access to clothing, healthcare services, lodging, and more. If they can’t help with your particular needs, be sure to ask them if they might connect you with other programs that are better suited to assist you.
See below for a list of food pantries and soup kitchens in the Miami area:
Salvation Army – Community Pantry
1907 NW 38th Street
Miami, FL 33142
Camillus House – Soup Kitchen
726 NE First Avenue
Rent Assistance in Miami
Housing costs make up a large percentage of consumers’ overall expenses, and especially true for those living in the great city of Miami. Just over half (55.2%) of homeowners in Miami have mortgages on homes that have a median value of $241,200. Those who have a mortgage owe, on average, about $1,796 per month. And those who rent pay an average of nearly $1,000 on their rentals every month. With a median annual household income of only about $34,901, many Miami families find it difficult to pay their housing costs every month.
People living in Miami who make less $20,000 per year are hit particularly hard by housing costs, spending almost one-third (29.2%) of their hard earned dollars on housing costs.
With numbers like these, it’s clear that many people living in Miami need assistance with their housing costs and may be helped by the many resources and programs offered within the area, including those below:
Camillus House: Provides financial and relocation assistance.
726 NE First Avenue
Miami, FL 33132
Florida Temporary Assistance for Needy Families (TANF): The TANF bureau works with families to help them become self-sufficient. TANF’s program features include:
- Assisting needy families so that children can be cared for in their own homes.
- Preventative measures for out of wedlock pregnancy.
- The encouragement of two parent families.
- Reduction of the dependency of needy parents by assisting with job preparation.
Median Housing Value
% of Housing Units with a Mortgage
Median Monthly Cost (w/ mortgage)
Median Monthly Cost (w/o mortgage)
Payday Loans in Florida