The most crowded state located on the north-east side in the New England area, the USA whose capital city is Boston. It’s the state which gives its contribution to boosting the economy of the country with its tech research & development centers, various service areas. Moreover, from a financial viewpoint, the state has some major rules and regulations to follow.
For day-to-day life you can’t borrow long-term loans in a traditional way as the cash required in an emergency means you need it on the spot. Hence, for instant situations, short-term loans are outlined but as the laws of every state are different, so it depends where you live. One such loan is a payday loan which is a small-dollar unsecured personal loan just for a few days to manage the current concern. Let’s scrutinize it as per the law of Massachusetts.
Installment Loans in Massachusetts
To lend some money is not forbidden in the state but the term payday loan
is banned and the reason is it’s high APR (annual percentage rate). Though in case, if anyone wants to lend some amount, either it’s a firm or self, have to apply for the license to the Division of Banks (DOB), and if get approved then only they are legal to give a small-dollar loan to the citizen of the state.
The refunding plan is all done with your checking account whose details you’ll provide while applying for the loan. It’s also named as post-dated cheque loan, cash, or check advance. In the state, payday loans averagely charge an APR of nearly 500% and that is a huge amount and for the repayment, you’ll get only 14 to 30 days as per the date of your next salary.
While borrowing this short-term loan, verify the license of the lender with the Massachusetts DOB. As per the state law, you can’t borrow less than $6000 from the loan providers but the only way to get a small loan is if your lender has a separate license of short-term loans as well. This step is taken to prevent people from falling into debt and to remove the fraudulent. Under this law, no lender can charge more than 23% of APR, not even for a cash advance. This is the main reason behind less usage of payday loans as there are fewer loan providers who offer check advance loans at such less interest.
The reason behind to find alternatives to payday loans is its highest cost and to avoid paying such a large amount, one can do the following:
- Use credit cards issued from your local banks or credit unions, which acquire reasonable charges for the only amount that you’ll use. The interest rates of credit cards are high too but not as much as payday loans.
- Ask your acquaintance, friends, or even boss for some cash in advance to avoid high interest.
- Can think and search for some installment loans that can give you a chance to repay in small monthly EMIs.
- Try to apply for small loans from banks, if you can be eligible by fulfilling their requirements because it can also save some amount of money.
- In fact, you can also take some help by contacting credit counselors to ask them for the way.
- You can even request your creditor to give some time to pay bills as soon as your salary will come. Plus, what other charges would be there if any.
- Check if there is any such payment or work that can be delayed without any interest or harm to your credit score or budget.
Bottom Line: As in Massachusetts, if you are in severe need of money then you may find few lenders who have a license for lending small-dollar loans but without authorized loan providers, it’s a violation of the law. So, the most important thing is to check the license and then move forward with the application process but with full awareness of consumer rights. Though, you should try other options first, then after opt for this when nothing can be done.