Are Cash Loans Until Pay Day Legal In Every State?
No, cash loans until payday programs are not legal in every state. in the United States of America have either banned these types of loans or imposed low-rate restrictions on such lenders. , where this form of lending still enjoys a legal status, have enacted different laws to regulate lenders’ activities. Awareness regarding the specific payday loan laws that are applicable in your state is very important for all those people who are considering borrowing this type of loan or are already trapped in a vicious cycle of debt that these loans are notorious for.
States Where Payday Lending Is Defacto Prohibited
The states where payday lending is defacto prohibited include Maryland, North Carolina, Vermont, Pennsylvania, District Of Columbia, West Virginia, Oregon, Massachusetts, Connecticut, New Hampshire, Maine, Arizona, Arkansas, Ohio, New York, New Jersey and Georgia. You cannot find a legal payday lender in any of these states.
If you are a resident of one of these states and an online payday loan company is offering you a cash advance, it is illegal on part of that lender. Internet-based lending companies often claim that since they are operating their business through Internet and that their offices are not based in any of these states, they can offer cash loans until payday to even those people who are residents of one of these states. Here, it is very important for you to understand that the state laws for payday loans apply depending upon the residential status of a borrower, not a lender. No matter where the offices of payday lenders are located, as long as you are a legal resident of one of these 16 states, it is illegal for them to issue you a payday cash advance.
Other States Where Payday Lending Is Legal
Though all states have enacted certain laws for cash loans until payday, but not all of them have made the laws favorable for the borrowers. Many states still allow extremely high APR on these types of loans. For example, the maximum APR allowed in Wyoming is 780%, 459% in Tennessee, 520% in North Dakota, 650% in Montano, 1980% in Missouri, 572% in Mississippi and 650% in Louisiana – just to name a few. But still,
the laws have provided a certain level of protection to payday loan borrowers. Many states have imposed certain . The states where rollovers are strictly prohibited include Wyoming, Washington, Virginia, Tennessee, South Carolina, Oklahoma, Ohio, New Mexico, New Hampshire, Nebraska, Montana, Mississippi, Minnesota, Michigan, Kentucky, Iowa, Indiana, Illinois, Hawaii, California and Arkansas.
How To Deal With Illegal Payday Lenders?
If you find out that the payday lenders you have borrowed cash loans until payday from are not running their businesses in full compliance with the payday loan laws of your state, you can against them with the regulatory authority in your state. Besides that, it is also important for you to keep in mind that the federal laws under Fair Debt Collection Practices Act (FDCPA) apply to payday lenders also. It means if the collection agents appointed by your payday lenders are harassing you, you can file a lawsuit against them. In fact, if the lenders are running illegal businesses, you can file a direct lawsuit anyway.
But, just because the payday loan companies you have borrowed cash loans until payday from are illegal ones, it does not mean that you are not liable to make the repayment. The court will still hold you liable to repay the money you borrowed. It is just that no interest or additional charges will apply; you will have to repay only the principal amount. It means if you
borrowed $500 and several months have passed while you have not yet made the repayment, you will be liable to pay $500 only. This payment is not made to the creditor but to the court while the court gives a final judgment about the sentences applicable to the illegal payday lender in question.
However, on a practical note, catching illegal payday loan companies (especially the internet-based ones) is not at all an easy task. Despite all the laws, hundreds of payday lenders are still running their illegal ventures and are trapping consumers in debts. Therefore, you are advised to do your research in advance before you sign up for cash loans until payday.
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