Payday Loan Summary by State Part 1
Every state has their own laws regarding payday lending. Some are more similar to some than to others. Here are some states and a summary of their laws so you can understand what states, including yours, does and does not allow these loans.
Alabama allows payday loans and they allow the person who is borrowing money to roll over their loan once. Once that has happened the borrower must repay the amount in full. If they are not able to pay in full the lender can then split the amount into four equal monthly payments. If however the lender tries to cash a check for the loan to be repaid and there are non-sufficient funds in the account the lender can then add on an additional fee.
In Alaska there was a bill signed by the governor in 2004 that gives the Department of Community and Economic Development additional licensing and regulatory authority over payday lenders. This bill allows the person who is borrowing money to rescind the loan with no cost to them by the end of the next business day.
The law in Arizona states that a borrower may only have one outstanding payday loan at a time. According to the law the borrower is able to roll over their loan up to three times. There were several bills that were introduced back in 2005 that amend requirements for the payday lenders and their loans.
Arkansas law allows payday loans to last up to thirty one days. There was a senate bill that amended the protection for the military as well as some licensing requirements. The maximum for a loan in this state is about four hundred dollars.
In California, in order to get a deferred deposit transaction the borrower must write a check for the amount to be held by the lender. The law does prohibit however any lender taking a check that has been held for more than thirty one days to be taken in to a bank to be cashed. The maximum that someone can borrow in this state is only three hundred dollars.
Colorado has a very simple law regarding payday loans. Their law says that only one loan can be taken out by one person at a time. They allow these loans to last up to forty days.
Connecticut has payday lending laws that allow anyone to operate and charge any fee that the borrower is willing to pay. There are other provisions of the state’s small loans act that the lender much comply with.
Delaware is another state where the law states that a payday lender can charge whatever fees or interest rates that the borrower agrees to pay. This state allows the loans to last up to sixty days. There are other provisions in the small loan act that the state has that lenders need to adhere to.
The District of Colombia has a minimum of fifty dollars for a payday loan and a maximum of one thousand dollars per borrower. The interest rate for these loans depends on the amount that is being borrowed. They only allow these loans to last for up to thirty one days.
Florida has passed laws allowing payday lenders to come into the state. The interest rate does vary based on the amount that is borrowed. The loan may last for seven to thirty one days and be up to five hundred dollars.
These are just some of the states and their laws on payday lending. Before you apply for a payday loan it is a good idea to know what the law is regarding them. Every state is different so it is good to know what you state says about payday lending.