Payday Loans

Iowa Payday Loan Laws

Iowa payday loan laws have been designed in a way to protect the rights and interests of those Iowa residents who are either considering borrowing a short-term cash advance or are looking out for legal help on how to get out of the nasty payday debt trap. Many payday lenders are engaged in unfair and illegal practices when it comes to payday lending. Therefore, your knowledge about your legal rights and the payday loan laws applicable in your state is very important.

Collection Fees

If a borrower does not make the repayment on the set due date, the lender is allowed to charge an NSF fee of up to $15, but this fee must not be charged more than once in any case.

Criminal Lawsuits Against Borrowers

If a borrower fails to repay the loan in time, lenders usually threaten them with criminal lawsuits. Though in the majority of states, payday lenders are strictly prohibited from filing criminal lawsuits against such borrowers, it is very important for you to keep in mind that there are no such laws in the state of Iowa. Iowa payday loan laws do not specify anything about it. It is entirely up to the court to decide whether criminal charges can be placed against payday borrowers on nonpayment of debt or not.

No Rollovers

The good news for the payday loan borrowers in Iowa is that the state laws strictly prohibit automatic rollovers or renewals or refinance of a cash advance loan if it is not paid on the set due date. This is a great relief for the borrower, as the loan will not keep on growing very fast because no further interest can be charged on such loans. However, it is important to note that other finance charges may be applicable, especially if there are some relevant clauses disclosed in the loan contract. That is the reason why it is always recommended to read the fine prints thoroughly before you sign any contract.

Two Loans At A Time

Payday Lenders in Iowa cannot issue more than two loans at a time to a single borrower. It is the responsibility of the lenders to make sure whether a loan applicant is eligible for another loan; if he/she already has two loans outstanding in his/her name, any lender must not issue another cash advance to him/her. If you are still issued a third loan, you will be liable to repay only the principal amount; no interest or other fees can be charged on such loans even if you fail to meet the deadline.

Interest Rates And Other Charges

As per Iowa payday loan laws, lenders can charge up to $15 as interest for the first $100 of cash advance and additional $10 for every $100 thereafter. Besides that, they can also charge up to $16.67 as additional finance charges for every $100 loan issued for a 14-day period. If we calculate the annual percentage rate, it comes to a whopping 433%. It is a clear sign that borrowing an easy short-term cash advance can prove to be very costly. The only relief is that these types of loans in this state do not push you into a never-ending cycle of debt, as the rollovers or renewals are strictly prohibited here.

Maximum Loan Amount And Maximum Repayment Period

A maximum $500 (in aggregate total) of payday loan can be issued to a single borrower at a time. It means even if you borrow two loans at one time, the aggregate total must not exceed $500. Besides that, Iowa payday loan laws also make it mandatory for cash advance lenders to offer up to thirty-one days of repayment period. Since rollovers are not permitted, extension in repayment period is also not allowed.


Custom Search

Tags: ,
Posted in Payday Loan Laws, Payday Loans | No Comments »

Leave a Reply

You must be logged in to post a comment.