The payday loan industry, which enables borrowers to take out small loans for a term of two weeks or more, has tapped a market opportunity. Virtually unheard of in the early 1990s, the number of payday lenders nationwide is currently estimated at 8,000-10,000. Borrowers can use a payday loan to pay for car repairs, medical expenses or other emergencies and then repay it when they receive their next paycheck.However, payday loans carry a very high cost. In Illinois, where no usury laws exist, the cost of a payday loan is typically 20 percent of the amount borrowed. The annual percentage rate of these loans can be over 500 percent. As the number of transactions (loans or rollovers) grows, the cost of the loan increases. For instance, if a consumer takes out a $250 loan and takes six weeks to repay it, the total loan cost is $150. The cost of borrowing $250 rises to $650 for 26 weeks and to $1,000 for 40 weeks.Despite industry claims to the contrary, a Woodstock Institute analysis of data collected by the State of Illinois determined that the average payday loan is rolled over 13 times. Woodstock Institute analysis also documents that payday loans are often made to lower-income borrowers and may create a greater burden for minority borrowers. Such costs can easily trap lower-income consumers in a downward spiral of debt.