Payday Loans

How To Find If Direct Payday Advance Lenders Legal Are Legal In Your State?

A general idea is that direct payday advance lenders are legitimate payday loan companies and borrowing from them is safe, but it is very important for you to keep in mind that such a formula does not make any sense. There are many direct payday advance lenders that are engaged in illegal activities and they are trying to trap consumers into debt trap using various unscrupulous techniques. Therefore, whether you are considering borrowing a new loan from them or already owe a large amount of debt to them, you must first find out whether everything they are doing is legal and in complete compliance with the payday loan laws of your state.

Even Licensed Lenders Can Do Illegal Things

When it comes to determine whether direct payday advance lenders are running a legal business, the first thing that is very important for you to understand is that meeting licensing requirements does not guarantee anything. State payday loan laws are not all about licensing requirements only. Almost every state where this form of lending is still legal, there are lots of restrictions on payday lenders. The laws have also provided certain legal rights to consumers. The awareness of those laws is crucial. The more you know about the specific laws that apply to payday lenders in your state, the better you will be able to protect yourself from illegal predatory lending practices.

Maximum Number Of Loans And Maximum Amount That Can Be Lent To You

To start with, every state has specified a maximum limit on the number and amount of loans that a consumer can borrow. But, if you borrow more than the specified limit, it is considered as a fault on part of your direct payday advance lenders, not you. It is lenders’ responsibility to make sure that the borrower qualifies for a specific type of loan as per the guidelines issued by the payday loan laws applicable in the state where the borrower resides. Even if you find at a later stage that your lenders issued you a loan more than the specified limit, you can still file a complaint against them with your state regulatory authority or with the federal trade commission.

Restrictions Regarding Rollovers, Collection Fees And Mandatory Repayment Plan

Likewise, most of the states have also imposed various restrictions on direct payday advance lenders on how they should deal with those borrowers who do not make repayment on set due dates. The provisions of rollover have been strictly banned in most of the states while many other states have specified a maximum number of times a defaulted loan can be rolled over. Besides that, over a dozen states have also made an affordable repayment plan mandatory, which means if a borrower does not repay their loans in time and meet certain criteria, they must be allowed to make the repayment in easy monthly installments.

The Borrower Is Still Responsible

To Make The Repayment

However, it is also very important for you to keep in mind that even if it is proved that the direct payday advance lenders you borrowed money from did not follow all the laws, you will still be liable to make the repayment on those loans. The only thing is that you can never be held liable to pay interest or any extra charges on those loans. All you have to repay in such cases is the actual principal amount that you initially borrow.

As you can see, just because direct payday advance lenders are licensed in your state, it does not mean they are following all the laws properly. If you want to protect your interest and rights, you must do your research thoroughly.


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