Know Your State Payday Loan Regulations
It’s interesting to see how much payday loan regulations vary from one state to another, with some states even banning this form of short-term lending. Legislators and lobbyists for consumer and industry groups have taken different views in each state, which accounts for some of the variation in legislation.
The differences between states – and between lenders in the same state – actually used to be even greater. Then each state started to tighten up its regulations to a greater or lesser extent, and the federal government imposed some nationwide lending standards as well. This legislation tends to be aimed at ensuring that consumers are treated fairly and that lenders are licensed to conduct business in the payday lending field.
As a consumer, you need to be aware of the laws and rules about payday loans in your state. This is so that you can plan ahead when you are considering getting a loan, as well as to protect yourself from scams. Now that almost everyone uses the internet, it’s become relatively simple to find the information you need. Here’s a site that lists all the up-to-date regulations for each state in the Union. You should be able to find all the basic information you need here, but you can also look up your state’s Attorney General’s site to see more details.
With the right facts in hand, you’ll be better equipped to decide how much you can afford to borrow from a payday loan provider. You’ll also have a good idea of the fees you should expect to pay, and how to tell if you’re being scammed. On top of that, you’ll learn how long you can keep your cash advance running and how many times you’re allowed to extend it.
Fifteen American states plus the District of Columbia have banned payday loans outright or imposed interest rate restrictions that make it unviable for companies to offer these short-term loans that carry relatively high administrative costs. The remaining thirty five states all cap interest rates at different levels, with six (Delaware, Idaho, Nevada, South Dakota, Utah and Wisconsin) setting no fee limits at all.
In Missouri, payday lenders are permitted to charge as much as $75 per $100 loaned for each standard 14-day term. Most states set far lower maximum fee rates, though, with $15 per $100 (Kansas, Rhode Island) and $17.65 per $100 (Arizona, California, Nebraska and South Carolina) quite typical. Certain states operate a tiered fee structure, for example Washington State, where you pay $15 per $100 on the first $500 and $10 per $100 on the next $200 of your loan.
Don’t forget to look at your state’s rules about collection and prosecution of borrowers who default on their payday loans. While lenders in some parts of the country are allowed to go after delinquent borrower, other states expressly forbid legal action against defaulters and even require lenders to set up fee-free repayment plans to help them get out of debt without too much pain.
Payday Lending experts in Arizona include:
3219 East Camelback Road
PO Box 32
Phoenix, AZ 85004
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