Payday Loans

How Much Cash Advance Fees Do Payday Loan Companies Charge?

Though the maximum amount of cash advance fees charged by payday loan companies vary significantly from one lender to another, there are still certain laws regarding the same which you must be well aware of. Within the last few years, many states have either completely banned payday lending or have imposed low-rate caps. These states are – West Virginia, District Of Columbia, Pennsylvania, Vermont, North Carolina, Maryland, Oregon, Massachusetts, Connecticut, Arizona, Maine, New Hampshire, Ohio, Arkansas, New Jersey, New York, and Georgia. In all these states, the maximum amount of interest rates and other charges is usually below 40% per annum, which is almost negligible as compared to the usual 400% or more charged by payday lenders. But, even other states, where payday cash advance programs are legal, have also imposed certain maximum limit on interest and other fee.

Fees Charged By Internet Based Lenders

It has been found that Internet-based payday lenders usually do not follow the state laws and they charge as much cash advance fees as they want. It is quite unfortunate that online payday loan companies are still issuing extremely high-rate cash advances to the consumers of even those states, where payday lending has been banned. Many borrowers have the misconception that these lenders are running their business through Internet and therefore the state laws do not apply to them, which is just not true. In reality, it is quite illegal for them to issue a payday loan to someone who is residing in a state that has banned payday cash advance programs. Likewise, if the lenders are charging you more than the set maximum limit for interest and finance fees, it is again an illegal activity, which you can file complaint against.

The Contract Paper Must Disclose The Fee Clearly

The Federal Laws in the United States of America have also made it mandatory for payday loan companies to disclose the terms and amount of cash advance fees clearly in the loan contract. There must not be any hidden clause. You are also advised to read the terms of the agreement thoroughly before you sign it. Sign it only if you are 100% sure that you can afford the repayment in a timely manner.

What If Your Lenders Are Charging You More Than The Set Legal Limit?

If you find out that your lenders are charging you a higher amount of money in the form of interest and other charges, you can take an array of actions, depending upon your specific situation. In general, the first thing you have to do is to restrict their access to your bank account. When you sign up for a payday cash advance, you either give your lender a post-dated check or authorize them to withdraw money directly from your bank account on the set due date. Now, that you have realized that you are being charged much higher cash advance fees that legally allowed, you should block that check or unauthorized the lender from direct withdrawal. You can contact your bank for the same; most banks will honor your request. You can then talk to your lenders about the issues. Any mutual agreement that you reach with the lender must be in writing. But, if the talks do not bring any solution, you can go ahead and file a complaint against that lender with the FTC or with your state authority.

The extremely high amount of cash advance fees that lenders charge usually trap consumers into a never ending cycle of debts. Unfortunately, the US laws are still not strong enough to take solid actions against illegal payday lenders. Therefore, if you want to protect yourself from such trap, you are recommended to avoid payday loans at all costs. There are several better alternatives available if you know where to look out for.

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