Starks said he knows of one woman who lost her job and didn't have a regular paycheck. But somehow, she got a payday loan to cover some of her bills. Many lenders do treat Social Security and disability payments as sources of income.
The Detroit woman had hoped she'd have another job by the time the payday loan was due but that didn't happen.
"She never got caught up," Starks said.
Payday loans offer a quick fix but consumer advocates warn that the loans can lead to long-term debt traps.
Many times, people think it's easy to take out a loan of $250 or $300 and pay it back by the next paycheck, usually in two weeks or four weeks.
Too often, though, payments on the loans, including interest and fees, bite into one third of the typical borrower's next paycheck, according to Pew's research. The borrower isn't able to cover basic expenses without taking out another payday loan.
Bourke noted that Pew's research indicates that a debt spiral can be triggered if a payday loan payment exceeds 5 percent of one's paycheck.
Many payday borrowers typically make $2,500 a month on average before taxes, so they might be able to afford a $125 payment. If they took out a $500 loan, they'd typically need to repay that loan with interest over five or six months, he said.
Trying to repay that loan too quickly -- or extending it for more than a year -- creates financial struggles.
Because the loan is short-term, the annual percentage rate can end up being 300 percent or 400 percent.