Payday Loan Laws by State, Simplified

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:rnWith the law not being completely against payday loans, they do allow the practice but have certain rules for the same. rnMaximum Loan Amount: $500rnMinimum Term of Repayment: 10 DaysrnMaximum Term of Repayment: 31 Days Alaska: rnEven 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. rnMaximum Loan Amount: $500rnMaximum Term of Repayment: 14 Days Arizona:rnArizona is one amongst the states that does not allow the practice of payday loans. Arkansas: rnJust like Arizona, Arkansas also doesn’t allow payday loans to be practiced in the state. California:rnEven 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.rnMaximum Loan Amount: $300rnMaximum Term of Repayment: 31 Days Colorado:rnWith a slightly different approach towards payday loans, Colorado allows the practice but with the minimum repayment term being way more than most other states. rnMaximum Loan Amount: $500 rnMinimum Term of Repayment: 6 Months Delaware: rnDelaware 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. rnMaximum Loan Amount: $500 rnTerm of Repayment: Less than 60 days. rnDistrict of Colombia: rnThe transaction of payday loans is prohibited in the state. Florida:rnWhile making terms clear for both payday and installment loans, Florida definitely allows the concept to exist in the state.rnMaximum 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.rnTerms 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: rnThe practice of payday loans is prohibited in the state.rnGuam: rnA state specific law for payday loans isn’t available. Hawaii:rnWhile allowing the concept to exist, Hawaii permits a decent amount of money that borrowers can avail from payday loan lenders.rnMaximum Loan Amount: $600rnMaximum Repayment Term: 32 days Idaho: rnIdaho 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.rnMaximum Loan Amount: $1000rnLoan Repayment Term: Not mentioned. Illinois:rnIllinois 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. rnIndiana: rnWhile 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.rnLoan Amount: $50-$550rnLoan Repayment Term: At least 14 days Iowa: rnWhile allowing payday loans to exist in the lending market, the rules laid down by this state includes the following:rnMaximum Loan Amount: $500rnLoan Repayment Term: Shouldn’t exceed more than 31 days. Kansas:rnA minimum of 7 days are required before one can repay his/her loan.rnMaximum Loan Amount: $500rnLoan Repayment Term: 7-30 days Kentucky:rnKentucky allows a maximum of two loans to be borrowed from a particular lender at a single time. rnMaximum Loan Amount: $500rnLoan Repayment Term: Shouldn’t exceed 60 days. Louisiana:rnWhile making it clear that no short term loan’s interest can exceed $45, Louisiana’s payday loan rules include the following: rnMaximum Loan Amount: $350rnMaximum Repayment Term: 30 days Maine:rnAccording 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; rnii) 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 givenrnRepayment Term: Not given Michigan:rnWhile allowing payday loans to be practiced in the state, Michigan has the following terms:rnMaximum Loan Amount: $600rnRepayment Term: 31 days Minnesota:rnLike California, Minnesota allows the exchange of payday loans in comparatively smaller amounts that one can use in order to fulfill their basic monetary needs.rnMaximum Loan Amount: $350rnRepayment Term: No more than 30 days Mississippi:rnMississippi 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.rnMaximum Loan Amount: $500 (including interest)rnRepayment Term: Not given Missouri:rnPayday loans definitely see a stability in the market with Missouri allowing the practice of it.rnMaximum Loan Amount: $500rnRepayment Term: 14-31 days Montana:rnMontana also has a minimum amount of a deferred deposit loan which is $50.rnMaximum Loan Amount: $300rnRepayment Term: Not given Nebraska:rnThe use of payday loans is allowed in Nebraska and their terms include the following:rnMaximum Loan Amount: $500rnRepayment Term: 34 days Nevada: rnThe terms of Nevada are a little different. Their laws demand that no borrower can borrow a loan that exceeds 25% of their monthly income.rnRepayment Term: No more than 35 days New Hampshire:rnWhile being in favor of the practice of payday loans, the rules and regulations of the state regarding these short term loans include:rnMaximum Loan Amount: $500rnRepayment Term: 7-30 days New Mexico:rnNew Mexico is against the business of payday loans.rnNorth Carolina:rnJust like New Mexico, even North Carolina is against the practice. North Dakota:rnOne cannot borrow another payday loan if he/she already has an outstanding balance of $600 to be repaid to other lenders.rnMaximum Loan Amount: $500rnRepayment Term: 60 days rnN. Marina Islands:rnInformation regarding the same isn’t available. Ohio:rnWhile allowing a fair amount to be borrowed through payday loans, Ohio’s rules include:rnMaximum Loan Amount: $1000rnRepayment Term: Different for different circumstances. Oklahoma:rnExclusive of the finances charges, Oklahoma allows the following amount of money in payday loan transactions:rnMaximum Loan Amount: $500rnRepayment Term: 12-45 days Oregon:rnAccording to NCSL, Oregon’s payday lenders are allowed to offer a huge sum of money to lenders needing or wanting them.rnMaximum Loan Amount: $50,000rnRepayment Term: 31-60 days rnPuerto Rico:rnNo information regarding payday loans is available for Puerto Rico. Rhode Island:rnWhile allowing payday loans to exist in the lending market, the terms of this state are:rnMaximum Loan Amount: $500rnRepayment Term: A minimum of 13 days, no maximum period is mentioned. South Carolina:rnThe state’s rules for payday loans are as follows:rnMaximum Loan Amount: $550rnRepayment Term: Not to exceed 31 days South Dakota:rnSouth Dakota requires one to follow these rules with regard to the transactions of payday loans.rnMaximum Loan Amount: $500rnRepayment Term: Not mentioned. Tennessee: rnThere are rules regarding the aggregate face value from all outstanding checks from one particular customer, which are as follows:rnMaximum Loan Amount: Shouldn’t exceed $500rnRepayment Term: 31 days Texas:rnTexas has a number of rules and regulations concerning payday loans, which are applicable to different situations. rnUtah:rnUtah 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:rnTheir loan regulations include:rnMaximum Loan Amount: $500rnRepayment Term: A term of at least two times the borrower’s pay cycle. rnVirgin Islands:rnInformation regarding payday loans for the state isn’t available. Washington:rnThe laws regarding payday loans in Washington include:rnMaximum Loan Amount: $700 or 30% of the gross monthly income of the borrower- whichever of the two is lower.rnRepayment 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:rnTerms regarding repayment and amounts are unavailable. Wyoming:rnThe information regarding payday loans for Wyoming are as follows:rnMaximum Loan Amount: Not given.rnRepayment 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.