Payday Loan Regulations
Posted on Friday, December 24th, 2010 at 1:14 pm in Helpful Payday Loan Info
All US states have legislation on payday lending, cash loan interest rates, payment plans, and more to protect both lenders and borrowers from fraud and unfair practices. Not all payday lenders are bad, but some have been known as predatory lenders in the past. Payday loan legislation protects consumers from bad lenders while still making alternative credit services available to the people who need them.
Many states cap annual percentage rates (APR) for all payday loans. South Carolina payday loans are capped at 15% interest, while payday loans in Colorado have APR caps ranging between 20% to 7.5% depending on the cash loan amount. These interest rate caps keep instant cash loans affordable for the consumers who depend on them while still ensuring that payday lenders don’t lose money on their loans and can stay in business providing bad credit loans for the consumers who need alternative lending services.
Payday loan legislation provides for fair payment plans as well. Many states require lenders to offer installment plans for customers who can’t afford to pay a lump sum from their next paycheck. The length of allowed payment plans varies from state to state, but all lenders must offer an alternative arrangement to help consumers. Several states also limit the number of rollovers allowed to a customer to combat irresponsible borrowing. Rollovers are what hurt customers most with high annual percentage rates, creating a debt trap that’s difficult for many people to break free from.
State payday loan legislation works to protect consumers and lenders in an industry that gets unfairly tainted with misinformation. If you want to know more about the payday lending laws in your state, contact your local consumer services or department of banking for information. Most states have websites to address consumers’ concerns on available financial services.
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