Are you thinking about taking payday loans? If yes then you have come to the right place because in this article we will be covering the legal status of payday loans in different states of USA. payday loans have become very popular. every 3 person out of 5 apply for payday loan for one reason or the other. there are several factors that you must consider before taking a payday loan. this article will give you an insight on some of the pros and cons of payday loan and the regulations that govern these loans in different states.
If you are resident of USA then you will understand which states in USA allow and prohibit use of payday loans.The legal information bureau for consumers in different states on payday loans has a page for every state informing rates of interest as well as the terms applicable for online payday loans.
Understanding legal status of payday loans
You can read the information about your state on the page of consumer information on payday loans. There are different states that offer different rates of interest on payday loans as well as are guided by different sets of rules and regulations. It is important to impose certain rules and terms on payday borrowing and lending, so that consumers can take full advantage of this facility as well as stay protected against cheating. Many money lenders try to cheat their customers by offering them high rate of interests, this makes it difficult for them to return the money and leave them in the debt trap. It is therefore duty of every consumer to understand payday loans completely and read the rules governing the state before applying for them.
The page consists information about annual interest rate for a 14 day period on amount of $100 for a particular state. Also you can find information on the maximum number of loans that you can take; you can also get information on renewals and prerequisites for extended repayment payday loans. In the states that are still using small rate caps the page provides citations for the laws to limit the rate of interest and loan rate cap. Different states protect their citizens from the illegal rate of interest or usury limits on caps.
There are several states in USA that prohibits racketeering rules. New Jersey and New York prohibit learning of payday loans through criminal usury status; restricting loans at 25 to 30% rate of interest. Rate of interest imposed by Arkansas constitution is 17%.
States protect their citizens from usurious payday lending by prohibiting loans or by setting usury limits or low rate caps. Different states offer payday loans at different rate of interest for example New Hampshire offers a rate of interest at 36% since 2009 after the meeting high cost loans. Different states and areas in USA are covered by different regulations and different types of rates of interest. It is thus important that you read the legal information for consumers on payday loans. This helps in keeping you informed as well as protect you against the usury rates of interest charged by the money lenders.