Know Your State’s Payday Loans Legislation
Lawyers have developed a payday loans legislation designed to help protect you against lengthy contracts, unclear agreements, and high interest rates. There are different rules or requirements per state, so make sure to look up different state policies on payday loans.
Making your life easier
There are different legislations per state, but the bottom line of having these policies is to make your life easier, not to mention your investments safer. As much as payday loans can help you get by until your next payday, some of them can be traps. They can drain money from low-income communities and waste your time with just paying off the interest rates.
Some cash advance lenders will lend you money and have you sign a contract that seems sound enough, but. in the long run, it is actually to your disadvantage. Some policies in some states have made it perfectly clear for lenders to state their contracts in the simplest way possible for the borrower to understand. At the same time, making these contracts clear can also save the payday lender’s business from clients or borrowers that intend to borrow and run.
As much as there are requirements for the cash borrower, the payday loans legislation also requires lenders that offer payday loans to register to the State Board of Financial Institutions and register for a payday loan license application.
In order to fulfill this requirement, they have to provide their name, location of business, partnerships, associations, businesses and corporations in the area of the payday loan business, background experience of the lender, and financial responsibility. Depending on the state, there may be other payday loans legislation requirements that they may ask of the lender in order to get their license. You can also inquire from the State Board of Financial Institutions on their requirements to have a background of what you can expect from cash advance lenders.
You must also be aware if your state has any payday loans legislation because if you are in a state without any related legislation, you have to be extra careful with the money that you borrow. This is because there is no law stopping lenders that offer payday loans from charging high interest rates or saving them from bad customers. There will be bad contracts and ridiculous interest rates, but it does not mean that all payday loan lenders in non-legislated areas are bad.
Amount of loan
Each state payday loans legislation has different amounts of allowable loans and it could go as low as $300 or as high as $1,500, maybe more. You have to keep in mind that payday loans are designed to be paid off on your next payday. If you borrow anything more than the amount of your next paycheck, then you may create more debt. Make sure to ask around from people you know or through other lenders on the amount of money that can be loaned, as well as how much it is you need and can pay off.
The most common time limit for paying off a payday loan is in two weeks’ time, but you have the option of rolling over the loan to another two weeks. However, you have to mind the interest rate because it is not going to change. Some contracts in the payday loan industry may be tricky when it comes to rolling over, so you have to be aware of the limits on your state’s payday loans legislation regarding the payday loan roll over, if there is any.
Interest rate limit
Some states still do not have interest rate limits when it comes to cash advance loans, and you can get further into debt if you are not aware of these limits, or they are non-existence in your state. States, like South Carolina, have a 15% maximum limit for any amount of loan $300 or lower, so that is $345 due from you on your next payday. Lenders can only charge this interest rate once upon signing the contract, so you can be assured that you are safe from higher interest rates.
As it has already been mentioned, there are different policies in the different states, so make sure that you are getting the right amount for your loan as you rightfully should.
The payday loans legislation is there to protect both you and the lenders. However, not all states have this legislation to help you make that better choice or to even have a choice in the matter.
Make sure that you check individual policies in your state to know what you should expect when getting a cash advance loan. You should never think to yourself that you have no time to look at the prerequisites of these loans because it will save your financial investments in the future.Payday or cash advance loans can be very handy in a tight spot, but in the long run, it can give you trouble if you are not careful. Be in the know, be critical, and be timely when you pay your loans because you can help yourself and others by knowing more about the payday loans legislation in your state.