In the current time, the possibility of going into a debt situation is growing like never before. With more number of banks and credit unions, the access of credit has grown in leaps and bounds. But at the same time if someone is in the need of quick financial assistance to handle an immediate problematic situation, it is a payday loan which comes to the rescue. A financial emergency can occur to anyone. Issues like home repair, defect in car or home appliances, sudden medical bills etc. can happen with any individual and such situations demand immediate resolution without giving any breathing space to arrange funds from any formal channels. Such loans hence become an appropriate solution as the application processing, documentation and loan disbursement happens in a day or two or sometimes in less than few hours. This factor of having a convenient and fast arrangement of cash gives the product its uniqueness and shares a major hand in its popularity with the masses. Payday Loans Virginia Online – Apply Now
This payday advance is an unsecured financial arrangement usually lasting from two to three weeks i.e. until the next pay cycle date of the borrower. As per the contract, the borrower is required to clear all his payments by such date so as to avoid any additional interest charges. This loan is infamous for having a very high APR. For example, each $100 borrowed for two weeks, $15 is charged by the lender. So for a $300 loan, the lender will charge $45 for 2 weeks translating into an APR of above 500%. In this case the borrower is paid $255 only and he has to provide a postdated check to the lender with an amount of $300. The state of Virginia has levied certain guidelines on the business of payday loans in Virginia
so as to protect the interests of the borrowers and help them stay away from debt trap. Some of the broad guidelines are
- Before getting in to any payday loan transaction, the lender is required to provide the borrower with a ‘Payday Lending Pamphlet’. This pamphlet is to explain the borrower’s rights and responsibilities.
- Lender is also required to provide a notice to the borrower stating the exact words in bold viz. “WARNING: A payday loan is not intended to meet long-term financial needs. It is recommended that you use a payday loan only to meet occasional short-term cash needs.” This notice is required to be signed by the borrower and a copy has to be maintained by the lenders in its records.
- The lender cannot electronically debit the account of the borrower through ACH or any other means with the loan amount. Lender can only take a replacement security check for the repayment of the complete principal and interest. In case of full repayment of the loan amount, the lender is required to return the security check to the borrower at the time of loan closure.
- The Simple annual rate of interest shall not exceed more than 36%. Lender can though charge a verification fee up to $5 apart from this interest amount.
- There are guidelines to minimum loan term as per the number of days in the pay cycle. E.g. if the borrower is paid salary on a weekly basis, the minimum loan term should be 14 days. In case the borrower gets salary every fortnight, the minimum loan term shall be 28 days. In case the borrower is paid on a monthly basis, the minimum loan term must be 62 days. And if in case the borrower gets paid with an irregular frequency (less frequently than on weekly basis), the minimum loan term will be 62 days.
- The lender to retain all the supporting documentation along with the borrower’s salary slips with the loan application.
- Once the loan has been paid off, the lender should provide and attach a copy of payment receipt stating loan satisfaction.
A borrower is recommended to check with multiple lenders and do a thorough evaluation to understand the terms and conditions. It is not difficult to take a Payday loan in Virginia, and a good home work goes a long way to tackle financial difficulties effectively.