A payday advance
is a type of loan that is taken out against a borrower’s next pay check. Payday advances are usually for small amounts and short term. Many people take out this kind of loan to resolve a temporary cash flow problem or to take care of a financial emergency that cannot wait until the next pay check.
A payday advance is a very convenient type of loan but attracts very high-interest rates. Because of the inherent risk associated with such types of loans, state regulators place very stringent rules guiding the practice. This is all in an effort to protect borrowers against predatory lenders. However, the level of regulation varies from state to state.
In Las Vegas, Nevada state law regulates the payday advance industry. However, the prescribed regulations are not as strict as compared to other states.
Payday advances are legal in Las Vegas. A person can take various loans from different lenders, regardless of any other outstanding loans. Further, there is no capping on the amount per loan that one can take. Interest rates along with any other fees are not capped as well.
Payday advance Las Vegas
However, even though there is no set upper loan limit, lenders cannot give a borrower a loan that is more than 25% of their gross monthly income.
Further, lenders also cannot extend the initial loan period for more than 60 days after the initial one has expired. Should a borrower default on a loan, subsequent interest rates cannot be in excess of 10% of the rate set by Nevada’s biggest bank.
Moreover, lenders are not prohibited from suing defaulting borrowers for civil liability. They are however prohibited from taking any threatening or intimidating action against borrowers.
Steps have also been taken to protect lenders against theft or fraud. Specifically, criminal proceedings may only be initiated against borrowers who take out a loan with no intention of ever repaying.
Payday Advance Las Vegas in Practice
Before signing any loan agreement, borrowers must go through every document thoroughly to identify any predatory loopholes. An acceptable loan agreement must properly define the following:
- The actual amount the lender will give the borrower.
- The specific interest rate that will be applied to the loan.
- The total amount expected by the lender at the end of the repayment period.
- This said, getting a payday advance in Nevada is a short and easy process. One can apply for it either online or at a lender’s physical location. This application requires the borrower to provide information such as:
- Proof of continuous income stream for the last ninety days, whether one is employed or not. The net income should be at least $1000 every month
- Proof that one is a US citizen and over 18 years of age
- Proof that one resides in the state they apply for the loan from
- A valid Social Security Number or Individual Taxpayer Identification Number
- Proof of an active checking account, operational for at least a month
- An active phone number and email address
When one submits such an application, it is forwarded to a third party, which makes the decision of whether or not to approve the loan. If the payday advance is approved, the borrower typically receives the funds within twenty-four hours.
Payday advances are a quick, easy way to bolster one’s cash flow. However, it is critical to only deal with properly licensed and regulated lenders. Further, it is critical to keep up with the defined repayment schedule to ensure this option remains helpful and not an additional financial burden.