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Mississippi Payday Loans Laws, A Good Match For The People

Mississippi State Map
Mississippi State Map
The state of Mississippi does have in place detailed Laws specifying how Mississippi payday loans businesses are to conduct themselves consumers. However the Mississippi code . § 75-67-501 et seq. sponsored by house rep. Metteta has been repealed by the state legislature. The effective date of the repeal is July 1, 2012. This bill provided that the maximum loan amount in the state is $400. The loan terms for a maximum of 30 days, and the maximum rate in fees to be charged for a payday loan was 18 percent of the check, so the finance charge for a 14 day $100 dollar loan would be $22; and the APR for a 14 day loan is 572%. With the current law still in effect there are no stated limits on the amount of loans that a single borrower can have active at one time, and there are no roll overs permitted.

The current statute further provides that no check cashing business licensed under this article shall directly or indirectly charge or collect fees for check cashing services in excess of the following: (a) Three percent of the face amount of the check or $5, whichever is greater, for checks issued by the federal government, state government, or any agency of the state or agency of the state or federal government, or any county or municipality of this state; (b) Ten percent of the face amount of the check or $5, whichever is greater, for personal checks; or (c) Five percent of the face amount of the check or $5, whichever is greater, for all other checks, or for money orders. A licensee shall not directly or indirectly charge any fee or other consideration for cashing a payday loan check in excess of 18 percent of the face amount of the check.

Mississippi State Flag
Mississippi State Flag

It is widely assumed that when the repeal of the current statute becomes effective on July 1, 2012; that the Mississippi has enacted statutes to regulate usurious lending practices in that state. Generally, the statutes in the state that govern usury pertain to personal loan transaction in Mississippi. The general usury limitation that is on the books in Mississippi today limits interest rates on personal loans to 10% or to no more than 5% above the Federal Reserve Rate, whichever is higher on the date that the personal loan agreement is entered into.

When it comes to commercial loans below $5,000, which is the category that Mississippi Payday loans will fall into after the repeal of the current law takes effect, the usury caps that otherwise apply to personal loans are utilized. However, when it comes to commercial loans that are in excess of $5,000, there is no usury limitation whatsoever. It is important to understand that if it is determined that a personal loan has been shrouded in such a manner so as to appear to be a commercial loan transaction, the exchange will be deemed to be a sham transaction designed with the intent to avoid the appropriate application of the usury restrictions that otherwise would have applied in the absence of the masking of the true nature of the exchange or transaction.

The statutory provisions governing usury, lending practices and related issues in Mississippi can be found codified in the Mississippi Code at Title 85, generally. The judgment rate on civil cases in Mississippi is set at 9% or at a rate that otherwise legally is permissible and that is set forth in the contract itself that is the subject of the litigation. Generally speaking, a personal loan agreement that contains a rate of interest that exceeds the usury caps and limitations will be deemed illegal contracts. As a rule, illegal contracts are stricken and deemed void. In this process, the loan agreement in such a situation will be deemed an unenforceable contract. The rationale is that if one of the most significant provisions of the contract is illegal in its formulation, the entire agreement necessarily should be deemed void and unenforceable.

Mississippi payday loans
Mississippi payday loans
So with the usury laws becoming the new measuring stick for Mississippi payday loans with the repeal of the current law coming into effect soon, there will still be available to the industry a great deal more latitude when it comes to how the lenders will structure their loan agreements with the consumers. This could be a great thing for consumers in that without any more restrictions on loan agreements a consumer and the lender can create loan agreements custom tailor to the needs and desires of the consumer. If the borrower is diligent in their efforts to shop around and compare shops to see which shops are offering the most favorable rates in which shops are offering the most favorable terms in surely a diligent shopper will find many more opportunities for great loan deals after the repeal takes effect.

Carrying out this process will become infinitely easy for the perspective borrower they do some preliminary work to make certain they are fully aware of all the dynamics that are going to go into their payday loan., For example it would be wise of you to know exactly how much money you really need to borrow before approaching a loan office. Some people make the mistake of borrowing too much money consequently spending more money in fees and interest what was really necessary for them to. The other hand there are some people that take out a loan with a payday loan provider only to discover that the amount of money that they borrowed was an insufficient amount and they may actually need to go back and get an additional own, incurring additional expenses in the process. To acquire Mississippi payday loans is a pretty simple and convenient process; however the preparation that should be undertaken prior to applying for and getting a payday should be extensive and exhaustive on behalf of the borrower. This may seem tedious for you initially but the end result is that you could very well save a great deal of money and land a loan agreement with terms to die for.