Always Know The Law Of The Land Before Making Any Financial Decision!
It is not unknown that the United States of America follows the concept of decentralization, which means that all the power is not held by the central government solely. The federal government too, has its hands full when it comes to making the right decisions for its respective state and fortunately or unfortunately, payday loans come under the law by the state.
With regard to the interest rates allowed, rollovers and extensions, let’s find out the terms of online payday loans from direct lenders and whether a payday loan is legal or not is a choice made by every state government in the U.S.A and we bring to you information regarding the same, to help you know more about short term loans in your place of residence.
Alabama:
With the law not being completely against payday loans, they do allow the practice but have certain rules for the same.
Maximum Loan Amount: $500
Minimum Term of Repayment: 10 Days
Maximum Term of Repayment: 31 Days
Alaska:
Even though a little more strict than Alabama, Alaska allows the concept of payday loans to run in the state so that individuals who require a small sum of money or have bad credit find it fairly easy to avail finances.
Maximum Loan Amount: $500
Maximum Term of Repayment: 14 Days
Arizona:
Arizona is one amongst the states that does not allow the practice of payday loans.
Arkansas:
Just like Arizona, Arkansas also doesn’t allow payday loans to be practiced in the state.
California:
Even though California does allow the business of payday loans to exist in the state, an individual cannot borrow more than $300. That however doesn’t mean that it’s of less importance. You can do a lot with $300 and can cater to financial requirements for groceries, to fix vehicles that have broken down, leaking pipes, or other such unanticipated situations that you may not have enough savings for. The repayment term however, is a fairly long one that gives borrowers a good number of days to pay back their loan.
Maximum Loan Amount: $300
Maximum Term of Repayment: 31 Days
Colorado:
With a slightly different approach towards payday loans, Colorado allows the practice but with the minimum repayment term being way more than most other states.
Maximum Loan Amount: $500
Minimum Term of Repayment: 6 Months
Delaware:
Delaware permits the business of payday loans and allows the transactions of such loans with a fair sum of money. This of course gives borrowers a wider range of situations to cater to such as funding medical emergencies, paying off other debts (debt consolidation), etc.
Maximum Loan Amount: $500
Term of Repayment: Less than 60 days.
District of Colombia:
The transaction of payday loans is prohibited in the state.
Florida:
While making terms clear for both payday and installment loans, Florida definitely allows the concept to exist in the state.
Maximum Loan Amount: $500 for loans that have to be repaid in lump-sum and $1000 for loans that are taken on the basis of an installment.
Terms of Repayment: 7-31 days for those loans that are not taken on the agreement of being paid back in installments and 60-90 for those that are.
Georgia:
The practice of payday loans is prohibited in the state.
Guam:
A state specific law for payday loans isn’t available.
Hawaii:
While allowing the concept to exist, Hawaii permits a decent amount of money that borrowers can avail from payday loan lenders.
Maximum Loan Amount: $600
Maximum Repayment Term: 32 days
Idaho:
Idaho is another state that permits payday loan businesses to run, while allowing lenders to offer up to $1000 to help borrowers deal with financial emergencies without having to wait for a long time to receive money when they need it urgently.
Maximum Loan Amount: $1000
Loan Repayment Term: Not mentioned.
Illinois:
Illinois has different rules for different situations. For more information it is advised that you look up the laws regarding payday loans in your state and apply accordingly.
Indiana:
While taking into consideration the fact that every dire situation needs a decent amount of funding, Indiana states that a payday loan cannot be provided if one asks for less than $50.
Loan Amount: $50-$550
Loan Repayment Term: At least 14 days
Iowa:
While allowing payday loans to exist in the lending market, the rules laid down by this state includes the following:
Maximum Loan Amount: $500
Loan Repayment Term: Shouldn’t exceed more than 31 days.
Kansas:
A minimum of 7 days are required before one can repay his/her loan.
Maximum Loan Amount: $500
Loan Repayment Term: 7-30 days
Kentucky:
Kentucky allows a maximum of two loans to be borrowed from a particular lender at a single time.
Maximum Loan Amount: $500
Loan Repayment Term: Shouldn’t exceed 60 days.
Louisiana:
While making it clear that no short term loan’s interest can exceed $45, Louisiana’s payday loan rules include the following:
Maximum Loan Amount: $350
Maximum Repayment Term: 30 days
Maine:
According to the laws stated by NCSL, “With respect to a consumer loan, other than a loan pursuant to open-end credit, a lender may contract for and receive a finance charge calculated according to the actuarial method, not exceeding the equivalent of the following: A. The total of:
(i) 30% per year on that part of the unpaid balances of the amount financed that is $2,000 or less;
ii) 24% per year on that part of the unpaid balances of the amount financed that is more than $2,000 but does not exceed $4,000; and
(iii) 18% per year on that part of the unpaid balances of the amount financed that is more than $4,000”.
Maximum Loan Amount: Not given
Repayment Term: Not given
Michigan:
While allowing payday loans to be practiced in the state, Michigan has the following terms:
Maximum Loan Amount: $600
Repayment Term: 31 days
Minnesota:
Like California, Minnesota allows the exchange of payday loans in comparatively smaller amounts that one can use in order to fulfill their basic monetary needs.
Maximum Loan Amount: $350
Repayment Term: No more than 30 days
Mississippi:
Mississippi has some interesting terms listed down when it comes to the exchange of payday loans. While taking the loan amount into consideration, they also have a policy wherein the total money borrowed/lent includes the interest.
Maximum Loan Amount: $500 (including interest)
Repayment Term: Not given
Missouri:
Payday loans definitely see a stability in the market with Missouri allowing the practice of it.
Maximum Loan Amount: $500
Repayment Term: 14-31 days
Montana:
Montana also has a minimum amount of a deferred deposit loan which is $50.
Maximum Loan Amount: $300
Repayment Term: Not given
Nebraska:
The use of payday loans is allowed in Nebraska and their terms include the following:
Maximum Loan Amount: $500
Repayment Term: 34 days
Nevada:
The terms of Nevada are a little different. Their laws demand that no borrower can borrow a loan that exceeds 25% of their monthly income.
Repayment Term: No more than 35 days
New Hampshire:
While being in favor of the practice of payday loans, the rules and regulations of the state regarding these short term loans include:
Maximum Loan Amount: $500
Repayment Term: 7-30 days
New Mexico:
New Mexico is against the business of payday loans.
North Carolina:
Just like New Mexico, even North Carolina is against the practice.
North Dakota:
One cannot borrow another payday loan if he/she already has an outstanding balance of $600 to be repaid to other lenders.
Maximum Loan Amount: $500
Repayment Term: 60 days
N. Marina Islands:
Information regarding the same isn’t available.
Ohio:
While allowing a fair amount to be borrowed through payday loans, Ohio’s rules include:
Maximum Loan Amount: $1000
Repayment Term: Different for different circumstances.
Oklahoma:
Exclusive of the finances charges, Oklahoma allows the following amount of money in payday loan transactions:
Maximum Loan Amount: $500
Repayment Term: 12-45 days
Oregon:
According to NCSL, Oregon’s payday lenders are allowed to offer a huge sum of money to lenders needing or wanting them.
Maximum Loan Amount: $50,000
Repayment Term: 31-60 days
Puerto Rico:
No information regarding payday loans is available for Puerto Rico.
Rhode Island:
While allowing payday loans to exist in the lending market, the terms of this state are:
Maximum Loan Amount: $500
Repayment Term: A minimum of 13 days, no maximum period is mentioned.
South Carolina:
The state’s rules for payday loans are as follows:
Maximum Loan Amount: $550
Repayment Term: Not to exceed 31 days
South Dakota:
South Dakota requires one to follow these rules with regard to the transactions of payday loans.
Maximum Loan Amount: $500
Repayment Term: Not mentioned.
Tennessee:
There are rules regarding the aggregate face value from all outstanding checks from one particular customer, which are as follows:
Maximum Loan Amount: Shouldn’t exceed $500
Repayment Term: 31 days
Texas:
Texas has a number of rules and regulations concerning payday loans, which are applicable to different situations.
Utah:
Utah has stated rules regarding rollovers, which mentions that a rollover cannot be extended for more than 10 weeks from the day the loan transaction was initially executed.
Virginia:
Their loan regulations include:
Maximum Loan Amount: $500
Repayment Term: A term of at least two times the borrower’s pay cycle.
Virgin Islands:
Information regarding payday loans for the state isn’t available.
Washington:
The laws regarding payday loans in Washington include:
Maximum Loan Amount: $700 or 30% of the gross monthly income of the borrower- whichever of the two is lower.
Repayment Term: The lender must set the date of repayment on or after the borrower’s pay day unless it is less than 7 days away in which case the next pay day or after that will be taken into consideration as the date of repayment of the payday loan.
Wisconsin:
Terms regarding repayment and amounts are unavailable.
Wyoming:
The information regarding payday loans for Wyoming are as follows:
Maximum Loan Amount: Not given.
Repayment Term: One calendar month.
With the article now coming to an end, you should know that the reason why such loans, even though with a slightly higher interest rate than a traditional one, exist because same day payday loans are given with no credit check which is a huge advantage to borrowers who need quick cash, or have bad credit ratings.
Disclaimer: The information cited in the article has been gathered from the website of NCSL and has been written according to our best knowledge and understanding of the same. However, the information provided in this article is basic and since laws do change every now and then, one must look up more information depending on their situation and need for a payday loan in their state.
Novlik is an independent Commodities trader with 7 years of activity in the international market. Having traded futures of commodities and other markets including debt and forex, he felt the need to study the Finance industry closely and from the roots. He believes that the knowledge that can be gained in such a way, can differ significantly from what is taught in schools and universities. This drove him into being passionate about expressing and sharing his knowledge about various topics that he believes he may have learnt nuances of, that a course like an MBA might overlook quite easily.
Having an alternate profile of an independent musician, the need for marketing expertise helped him discover writing as a passion. Years of experience writing for his own profile and posts, he gained credible skills in expression while working on influencing people through creating advertisements and blog articles. He now uses his creative and expressive writing skills to expound his observations in the Finance industry, in whatever way it may be relevant to his understanding and insights, that he believes may someday benefit someone significantly.