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Payday Loan Laws

Laws on Payday Loans

If you do live in the US and want to get a quick and easy payday loan or cash advance, make sure that you are using a loan lender that is compliant with the current Payday Loan Laws, as well as, lenders that are highly rated and reliable. Laws on payday loans are easy to find, and each state has their own set of laws governing the use of short-term loans within a particular state for as well as cash advances online, and online payday loans, including no fax payday loans, same day payday loans, and even bad credit payday loans.

Getting to know Payday Loans: Why it's good to review!
Taking out a loan of any kind is a responsibility. The more information you know about the payday loan you receive - the better off you are. CashAdvanceReviews lets you know right away what others think about a particular loan, and we have even more information to help you right here.

Cash Advance 411: Want to know more about how payday loans work?

Q: What is a cash advance?

A: Payday loans are small-dollar, short-term, unsecured loans that borrowers promise to repay out of their next paycheck or regular income payment. Payday loans are usually priced at a fixed-dollar fee, which represents the finance charge to the borrower.

Q: What will I be charged for taking out a payday loan?

A: Look for the APR (Annual Percentage Rate) Even the Federal Deposit Insurance Corporation (FDIC) Recommends: "Comparison shop for loans by looking at both total dollar costs and the Annual Percentage Rate (APR). Payday lenders, for example, typically charge about $15 for every $100 borrowed. So, on a $500 loan for two weeks, you'd pay $75 in interest. That might not sound like a lot of money to pay for a small loan, but it translates to a whopping 391 percent Annual Percentage Rate! (The APR is the effective annual interest rate on a loan after taking into account one-time fees and interest.)"

Q: Does payday lending differ in each state?

A: Yes! Payday loan (or cash advance loan) rates are controlled each individual state. Select your state below: (insert links via state abbreviations AL, AK, AR, CA, CT, �)* *upon clicking on each state user will be taken to a state specific page similar to the following page)

Legal Status of Payday Lending by State: *
Payday loans are small loans subject to state regulation. Traditionally states capped small loan rates at 24 to 48% annual interest and required installment repayment schedules for small loans. Many states also have criminal usury laws to protect consumers. For example, New York 's criminal usury cap is 25% annual interest. Payday loans are legal in states where legislatures exempted these lenders from small loan or usury caps. In states that repealed small loan rate caps or usury limits for licensed lenders, payday lenders are allowed to charge unlimited rates.

Prohibited by Small Loan Laws or Usury Caps:
Currently eleven states and two territories have small loan laws or usury caps that effectively prohibit payday lending at triple-digit interest rates. In addition, Oregon now caps one-month loans at lower than typical payday rates. The District of Columbia repealed payday loan authorization, effective early in 2008. In addition, the Arkansas Constitution caps rates at 17% annual interest, but the legislature enacted a law that permits check cashers to make single payment loans based on check holding. The constitutionality of payday lending at triple-digit interest rates in Arkansas is being challenged in the courts.

Authorized by Specific Payday Loan Laws or Licensed Lender Laws:
These states enacted safe harbor legislation for payday lenders and permit loans based on checks written on consumers' bank accounts at triple digit interest rates. The only state that does not explicitly authorize payday loans by law is Wisconsin where licensed lenders are permitted to charge any rates they choose.

* Provided by CFA