Payday Loans

Hawaii Payday loan laws

As per Hawaii payday loan laws, payday lending is legal in the state of Hawaii, but there are certain restrictions that have been imposed on lenders in an attempt to protect the rights and interests of consumers. Though the state laws have not done much to reduce the high payday loan interest rates, there are still plenty of legal provisions that ensure borrowers do not get into a viscous cycle of ever growing debt. Following is a brief rundown on it.

Nonpayment Of Payday Debt Is Not A Criminal Activity

When a borrower fails to repay the outstanding debt on short-term cash advances, lenders and debt collectors usually threaten them that they will file criminal lawsuit against them. It is very important for you to keep in mind that such it is illegal for the lenders and payday debt collectors to give such threats because Hawaii payday loan laws do not treat nonpayment of payday debt as a criminal activity. The only situation when criminal charges may be placed against the borrowers is when they close their checking bank accounts without notifying the lenders in an attempt to stop payment. If the check bounces due to this reason, borrowers may have to face criminal lawsuits. Therefore, you are advised if you are going to close your bank account, you must first notify your lenders about it in writing.

Collection Fees

Licensed payday lenders in Hawaii can charge a maximum of $20 as NSF fee, but it is important to note that check cashers are not entitled to recover damages, especially those check cashers who do not do proper verification and accept checks passed on insufficient funds.

Rollovers Or Renewals Of Loans Are Strictly Prohibited

The best thing that Hawaii payday loan laws have done in favor of the borrowers is that they have made rollovers or renewals of payday loans illegal. It means if you fail to repay the loan on the set due date, lenders can charge you late fees and certain other financial charges, but they cannot renew the loan for another month. This way, you do not have to pay addition interest on triple digit APR anymore. Because of this provision in the state laws, payday lenders here do not succeed in putting the borrowers on a viscous cycle of debt.

No Provision For Mandatory Repayment Plan

The payday loan laws in Hawaii do not make it mandatory for the lenders to provide an affordable repayment plan to those borrowers who are otherwise unable to make the repayment because of their poor financial condition. However, it does not mean that this option is not available to you. Since rollovers or renewals of loans are not permitted in this state, even lenders do not have much option to recover their money. It is very much likely that they will accept your proposal to repay the debt in small monthly installments. Therefore, you are strongly recommended to give this option a try.

How Many Outstanding Loans You Can Have At A Time?

Hawaii payday loan laws allow you to have a maximum of just one outstanding payday loan at a time. It means if you already owe certain debt to a payday lender, another lender cannot issue you a second loan until you pay off the first one in full. If you still get approved for a second loan, it will be considered as an illegal activity and you have the right to file a complaint against the lender with your state authority. But, it is important to note that you will still have the obligation to repay that second loan but without any interest – you will just have to repay the principal amount.

APR, Financial Charges, And Other Rates And Fees

The maximum APR (annual percentage rate) that payday lenders can charge on a $100 of loan issued for a period of 14 days is 459%. The financial charges in total must not exceed $17.65 on $100 loan issued for a 14-day period. Besides that, lenders are also allowed to charge a maximum of 15% of the face value of the check as finance rate and fees.

Maximum Loan Term And maximum Loan Amount

Payday loans in Hawaii can be issued for a minimum of 14 days and for a maximum of 32 days. Hawaii payday loan laws also restrict the maximum loan amount to $600 only.

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