Important Links for Laws Regulating Lending in US

The laws that surround lending practices in the US are complicated. If you want to know your rights and look to make sure that the lenders you are using are in fact doing “business by the books”, here are vital resources to help you research. You can start out on our site reading the page that covers payday loans. 

Start out by reading up on the Truth in Lending Act here on Wikipedia. There are good links as footnotes in the bottom of the article and in the “further reading” section after the main article.

To get to the deep legalese of these acts, please see Cornell Law’s clickable catalogue of Regulation Z.

 

 

 

Blue Trust Loans increases max loan amount to $2,000

Blue Trust Loans has increased their max loan amount from $1,250 to $2,000.

Since this site has been running reviews of payday loan and cash advance lenders, this is the highest amount that we have seen yet! This is good news for anyone looking for a the highest amount payday loan online we’ve ever reviewed. A maximum loan amount of $2,000 represents a change in the way lenders are looking to lend.

While Blue Trust Loans are actually different from traditional payday loans and cash advances, they are actually installment loans and present a good alternative.

Changes to the main payday loan review homepage will be made immediately to reflect this new maximum amount.

 

 

What You Should Know About Payday Loans and Cash Advances

Fast cash Payday style loans or cash advances may not be the best solution for your short term cash needs.

How Payday Loans Work:

Specifics may vary from lender to lender, but in general, here’s how they work:

  1. The borrower writes a personal check to the lender. The amount of this check is equal to a) the cash advance or payday loan plus b) interest and service fees charged by the lender.
  2. Credit ConsulingThe lender gives the borrower the face value of the check (a in step one) minus the fees (b).
  3. The lender then holds the check until the due date of the loan. The due date is typically, but not always, the next payday for the borrower.

How Payday Loan Fees are Calculated

The fees on the cash advance (loan) can be based on increments of the money borrowed. For example: a fee of $15 for every $100 borrowed. They may also be a percentage of the face value of the check written by the borrower. The borrow can be charged additional fees if the loan is extended.

The federal Truth in Lending Act requires lenders to disclose the true cost of the loan. Lenders must provide in writing the finance charge ( service fee ) and the annual percentage rate ( APR ) before you sign the loan. The APR may vary, and is based on the length of your loan, the service fees, your interest rate, and the amount borrowed. You can calculate this APR using our calculator.

A Payday loan can be a very expensive financing tool. Let’s say you borrow $200 for two weeks and you write a person check for $225, with the additional $25 being the fee to borrow the money. The lender agrees to hold your check for the 14 days. When that time comes, the lender deposits the check and $225 is deducted from your checking account. But if you roll-over the loan for an additional 14 days, another $25 service fee is added, so in 14 days, $250 will be deducted from your checking account. So you will have paid $50 to borrow $200, which equates to an annualized interest rate of 300% !

Alternatives to Payday Loans

A payday loan may not be the best option for your situation. Consider these alternatives.

  1. Consider joining a credit union. Small short-terms loans may be possible using cars or other property for collateral, or your own personal credit. Requesting a cash advance on your credit card at 21% is high interest, but still considerably less than the payday loan or cash advance.
  2. If you take a payday loan or cash advance, shop online for the lowest costs. Compare the finance charge (service fee) and APR, which includes interest and other credit costs. Look for the lowest overall APR. If you are in the Military, you receive special protections against unreasonably high fees or rates. But all consumers in most states have some degree of protection which limits interest rates and fees.
  3. Despite protections payday loans are expensive debt. If you roll-over the loan the actual cost of the borrowed funds could be double the amount lended. Taking the time to search for other credit offers may net you lower costs.
  4. Contact your loan servicer, or creditor, as soon as you realize you are having difficulty making payments. Most will will work with consumers and give an extension on your bills if they believe you are acting in good faith.
  5. Contact a credit counseling service to help create a personal budget or to work out a debt repayment plan with creditors. There are non-profit groups in every state that offer credit counseling to consumers at no cost.
  6. Gather your daily and monthly expenses and make a realistic budget. Plan for your spending needs and avoid unnecessary purchases. Small every day items like coffee or newspapers add up. Commit to set aside a small amount for savings each week, even $5 will add up and help with emergency or rainy day expenses. Saving the fees on a $200 on a six month payday loan, for example, will create a significant buffer against needing the loan in the first place.
  7. Obtain overdraft protection for your checking account. This is NOT a loan, but it will help protect you from checks being returned to creditors and create further problems. Shop around for the best terms on overdraft protection, ask the cost per item and what it covers, or for how long.

The bottom line on payday loans is that if you must use one, pay it back quickly. Do not allow it to roll over and increase your costs, and budget, budget, budget.

Resources

The FTC provides information to help consumers spot, stop, and avoid fraudulent, deceptive and unfair business practices in the marketplace. Complaints can be filed at https://www.ftccomplaintassistant.gov/ or to get free information about consumer issues and protection visit http://ftc.gov/

You can contact the consumer protection agency in your area for more information on state or local protections for cash advance and payday loans. You may also consult the GSA Consumer Action Handbook at www.consumeraction.gov. And state offices are listed at: www.consumeraction.gov/state.shtml

Low interest payday loans stairs

Low Interest Payday Loans: Do they exist?

Low interest payday loans are a myth

Low interest payday loans may sound too good to be true. And the truth is that’s the case.

Payday loans have high interest rates because the lender wants to make sure that they get their money back. A good credit score represents the that people pay what the owe. Without it there is no guarentee. If you are getting a payday loan, chances are you have no or bad credit. And the lender needs to make up for his losses on bad loans by charging you more.

Low interest is usually reserved for those who have good or excellent credit. If you want access to low interest loans, you should consider getting out of the payday loan cycle and improve your credit with me in the new year. We want to make sure that we’re avoiding any possible debt traps. But to be honest if it were as simple to save as it were to spend, then we wouldn’t all have this problem with cash flow shortage.

The truth is that we need to make sure that we can move up, just like the Jeffersons, to the next credit bracket.

If you want low interest loans: fix your credit

I hope that as we near the end of the year, you have started to take my advice and are compiling your bills and thinking about your committment to freeze any future credit card use and slow down on the payday loans.

Its also worth noting that if you want to start taking this pathway and looking for some companies that may be able to offer you the most reputable options, it is worth considering looking in the Consumer Affairs listing of payday lenders.

Personal loans typically have lower interest

There are a couple companies that are in both the payday loan and short term loans (also called installment loans). One of these companies is ACE Cash Express. They have varrying reviews and for the most part they seem to be okay with consumers.

Obviously, I would like to recommend you to the short term loan over the payday loan since then the interest rates would be lower. These are also referred to as installment loans. If you go onto the ACE Cash Website, you can see that there are a number of options on the top header of the website.

Here you’ll see that there are payday loans, installment loans, title loans, prepaid cards, money transfers, tax services and more. ACE is truely working to be its own self sufficient business that is one stop for all of its consumers.

Payday Loan State Maxiums

What is the maxium payday loan amount for my state?

Payday loans are not available in all states

They also have different maxium loan amounts!

First of all, not all states allow payday lending. Because, different states have different terms for payday loans, it is important not to take a quick look at our list below. In addition to states either allowing or not allowing payday loans, especially relevant is the fact that there are laws that regulate payday loan state maxiums.

If you find yourself in a situation where you need to get a payday loan, then it is best to make sure that you:

  1. Check the list below to see if your state is included and what the max loan amount you can expect is.
  2. If its not on the list, double check here.
  3. Once, you know what you can get on the market, go to our list of associated payday lenders.

Sometimes, you will find that even if you are on the OK’d list, the online lender may have choosen not to do business in your state. Furthermore, you can apply online anyway and leave the homework to the loan companies. Rather than worry about if you fit the criteria before applying, they will tell you outright whether or not you qualify based on an automated checklist that they have.

So to get started with step one, there are the basic overviews of loan amounts by state. Remember to check out further information in the link if you don’t see your state.

Payday Loan State Maxiums:

States with a payday loan amount max less than $500

  • California ($300)
  • Louisiana ($350)
  • Minnesota ($350)
  • Montana ($300)

States with a max $500 loan amount

  • Alabama
  • Alaska
  • Colorado
  • Florida (exclusive of fees)
  • Iowa
  • Kansas
  • Kentucky
  • Mississippi
  • Missouri
  • Nebraska
  • New Hampshire
  • North Dakota
  • Ohio
  • Oklahoma (exclusive of finance charge)
  • Rhode Island
  • South Dakota
  • Tennessee
  • Virginia

States with a payday loan amount max above $500

  • Delaware ($1000)
  • Hawaii ($600)
  • Idaho ($1000)
  • Illinois ($1000 or 25% of consumers gross monthly income, whichever is less)
  • Indiana ($550)
  • Michigan ($600)
  • North Dakota ($600)
  • Oregon ($50,000)
  • South Carolina ($550)
  • Washington ($700 or 30% of consumers gross monthly income, whichever is less)

Finding more information on payday loans

In conclusion, different states have differnt laws and the payday lenders need to play by these rules. If you want to learn more about then lending practicing laws in your state, I encourage you to check out this website on payday lending state statues.