State Legislation Improves Continuity Of Washington Payday Loans

Washington payday loans are generally small unsecured loans made for the purpose of receiving cash for a short period of time. These loans are usually unsecured loans and ordinarily have a rate of interest higher than traditional lending institutions such as banks. In many cases the borrower gives the lender a post-dated personal check for the advanced amount tendered to them, in addition to the fees and interest that is being charged for the loan. The lender will keep the check for the term loan, then at the end of the term will either deposit that check, or the customer can bring the cash to the lender and reclaim the personal check. This in a nutshell is the way payday loans usually work, however there are some of the things that a borrower should know in order to make sure they are receiving the best possible service as well as receiving all of the rights and privileges that belong to them as a resident of the state of Washington. A well-educated well informed customer is always a customer that is going to receive the best possible deal no matter what a financial transaction may be payday loans are no exception to this rule.

As of January 1, 2011, to end in a few revisions made to the state law also the governed Washington payday loans. Legislators felt that these laws would improve the stability and security to the payday loans industry in the state of Washington. Now with the new changes borrower may only receive a loan the amount of $700 or only 30% of the customers gross monthly income, whichever of these two is the lesser amount. As someone considering a loan should also be aware chore loan information will be placed a registered state-wide database, this is done for the purposes of ensuring that all payday lenders in their files the most current information. With the new rules in place a borrower only allowed to receive eight loans in a fiscal year. As a borrower you find yourself in the unfortunate position in which you are a unable to repay your payday loan in a timely manner, as a consumer you do have the right to request an installment plan to repay your loan without incurring any more additional fees, however should also know you are already in possession of current installment plan with a lender then the laws of the state prohibit you from receiving any additional loans. Of course lenders are prohibited from harassing or intimidating a borrower when attempting to collect a loan. Should happen to find yourself be harassed by a licensed lender in you should contact the DFI a file a complaint against them.

The Department of Financial Institutions (DFI) licenses and regulates payday lenders and the payday loan industry. The legislators of Washington State are aware the fact it in these challenging economic times Washington payday loans can play a very important part in maintaining a stable economic balance in the lives of their constituents. For this reason these laws have been put in place for the purpose of trying to provide for the residents of Washington a fair and safe environment in which to utilize this very important component in our Financial System. As the economy becomes more and more challenging the industry is experiencing an increase in clientele from more elevated economic backgrounds than previously experienced. More middle to upper middle class homeowners have discovered the benefits ease and convenience of acquiring a loan. No longer the exclusive preserve of the lower class that it once was, the industry is experiencing a significant influx of a more solidly middle class individuals in need of an occasional cash influx to help them in a time of a lack of cash flow.

Representatives Kelley and Santos sponsored house bill 1195 which stipulates that a license and endorsement are needed to make small loans in the state of Washington. House bill 1810 sponsored by Representatives Appleton, Rolfes, and Darneille mandates that a lender must set the due date of a small loan on or after the date of the borrower's next pay date. If a borrower's next pay date is within seven days of taking out the loan, a licensee must set the due date of a small loan on or after the borrower's second pay date after the date the small loan is made. It goes on to establish that the termination date of a small loan may not exceed the origination date of that same small loan by more than forty-five days, including weekends and holidays, unless the term of the loan is extended by agreement of both the borrower and the licensee and no additional fee or interest is charged. A Washington Payday loans licensee is prohibited from making a small loan to a borrower who is in default on another small loan until after that loan is paid in full or two years have passed from the origination date of the small loan, whichever occurs first. In addition a licensee is prohibited from making a small loan to a borrower in an installment plan with any licensee until after the plan is paid in full or two years have passed from the origination date of the installment plan, whichever occurs first.

These laws were put in place to help consumers to not overburden themselves with Washington payday loans. Sometimes consumers experience how easy and convenient it is to acquire these loans, they make the securing of a payday loan a first option for themselves rather than a last one. The individuals should carefully consider their own personal financial circumstances when considering the acquisition of a payday loan. When this financial instrument is used properly it can be an invaluable service to the people that utilize them. For those that have the discipline to take on such a short term loan and to repay it in a timely manner never have an issue with interest rates for payment schedules, it tends to be the people that are not disciplined in their finances that have the greatest difficulty with such loans. These people should carefully consider every possible option prior to taking one on.