Archive for October, 2010

North Dakota Payday Loan Laws

As per North Dakota payday loan laws, payday lending is legal in this state, but there are certain restrictions that have been imposed on lenders. Unfortunately, despite all those restrictions, a short-term cash advance from payday lenders is still a very expensive and risky financial option. If you are already trapped in payday debt and if you feel that your lender is treating you unfairly and illegally, you can file a complaint against them with the North Dakota Department of Financial Institutions, which is the regulatory authority in this state. You can fax them at (701) 328-9955 and give them a phone call them at (701) 328-9933. You can also write them or visit their office at 2000 Schafer Street, Suite G Bismarck ND 58501.

Criminal Actions Prohibited But There Can Be Exceptions

Though North Dakota payday loan laws have strictly prohibited payday lenders from filing criminal lawsuits against borrowers if they fail to repay the loan in time, there can be certain exceptions. For example, if you borrow short-term cash advance and then close your checking bank account on the date of the original transaction.

Collection Fees

Collection fees can be charged only if a specific provision regarding the same has been disclosed in the loan agreement. The state laws have also imposed a maximum ceiling on the collection fees, which is $20. Payday lenders can charge a maximum of $20 just once as non-sufficient fund fee.

Cooling-Off Period Limit On The Number Of Outstanding Loans

Though there are no specific provisions under the North Dakota payday loan laws regarding how many outstanding payday loans a borrower can have in his/her name at one time, the aggregate total on all outstanding loans to all lenders must not exceed $600. There is also a cooling-off period of three days, which means lenders cannot issue another cash advance to a borrower until three days pass since he/she repays the previous loan in full.

One Rollover

North Dakota allows one time rollover of outstanding loans that are not repaid in time, but the renewal fee must not be more than twenty percent on the amount of loan that is being renewed. It means if the outstanding balance is $600, you will have to pay up to $120 as renewal fee only; add to this the burden of interest at the agreed rate for the extended period of time. Besides that, there can be certain other finance charges as well. So, the overall debt picture can get very ugly even after just one renewal.

Interest And Finance Charges

North Dakota payday loan laws have not made any effort to reduce the sky-high interest rate that lenders in this state charge on short-term cash advance. Lenders here are allowed to charge a whopping 520% per annum as APR (annual percentage rate). They can charge up to 20% flat on the amount of loan issued. For example, if you are borrowing $300, you will have to pay $60 in the form of interest only. Add to this the additional finance charges that can be up to $20 for every $100 of loan issued for a period of fourteen days. It means you are going to pay another $60 as finance charges. That makes the total outstanding balance on the due date (after fourteen days) to $420 ($300+$60+$60). What is more, the state laws also do not mind if the lenders charge certain amount of money as databasing fee also. Worse, no maximum limit has been specified under the laws regarding databasing fee; the lender has been given the liberty to charge as much as they want as long as the same has been mentioned in the loan contract and you have signed on it. Therefore, make sure you read the fine prints thoroughly before you sign it.

Repayment Period And Maximum Loan Amount

The repayment period cannot be longer than sixty days. Besides that, North Dakota payday loan laws also impose a maximum limit of $500 on the amount of loan that can be issued per account. It means though you can have multiple cash advances in your name with an aggregate total of up to $600 on all loans, you cannot borrow more than $500 on one account.


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