Payday Loans

Kansas Payday Loan Laws

You must have heard a lot about the risks associated with short-term cash advances, which are often very easy to obtain but very difficult to pay off. If you are a resident of Kansas, you must be well aware of certain Kansas payday loan laws in order to make sure that your interests and rights are well protected. Though many other states that have completely banned payday lending, it is still quite legal to offer short-term cash advances in the state of Kansas. But there are a few rules and regulations that lenders and borrowers must follow. The Office of the State Bank Commissioner regulates payday lending practices in the state of Kansas. If you have any complaint against your lender, you can file a complaint with them; their fax number is (785) 296-0168 and their phone number is (785) 296-2266. You can also send a written complaint to them by mail; their address is 700 SW Jackson, Suite 300 Topeka KS 66603.

Criminal Action Is Prohibited

Just like the laws applicable in most other states, Kansas payday loan laws also strictly prohibit lenders from taking criminal actions against those borrowers who are facing difficulty in making the repayment of their loans. Though, you are legally obligated to pay off the loan, nonpayment of debt is not considered as a criminal offence. Lenders can file civil suits against borrowers in extreme cases. If you are getting threats from lenders that they will send you to jail or that they are going to garnish your wages or that they are going to sell off some of your assets (such as, your car) to recover their money, let them know that you are well aware of the laws applicable in your state and that you very well know that any such attempts from lenders are completely illegal unless there is a court order. But again, even if there is a court order, it is not the lender but a trustee appointed by the court who will implement the orders.

Collection Fees And Rollovers

Kansas payday loan laws allow lenders to charge certain amount of collection fees, but only one time, in the form of NSF fee. However, it is important to note that there are no specific provisions regarding the number of rollovers or renewals. It means if you fail to make the repayment on the set due date, your outstanding loan amount may just keep on rolling over and over, which may eventually push you into a viscous cycle of payday debt because lenders here charge triple-digit APR.

Maximum Number Of Loan

No matter which places the lenders are located in, if they are issuing short-term cash advances to an individual residing in the state of Kansas, they must keep in mind that the borrowers from this state cannot be eligible for more than two outstanding payday loans at a time. If they are already having two outstanding payday loans, it will be illegal for any lender to offer them a third payday loan. But, it is also important for you to keep in mind that if you borrow a third payday loan, you will still be liable to pay the principal amount without any interest or finances charges.

Maximum Loan Amount

As per Kansas payday loan laws, you cannot borrow more than $500 (aggregate total, even if you borrow two loans) in payday loans.

APR And Finance Charges

Payday lenders here can charge up to 15% interest. Besides that, for a $100 of loan issued for a 14-day period, they can also charge up to $15 as additional finance charges (such as, in the form of processing fees, approval fees, and others). This way, for a $100 of loan issued for a 14-day period, the APR can be a whopping 390%.

Repayment Period

The repayment period on payday loan must not be less than seven days and more than thirty days.

As we can see, the APR on these short-term cash advances is still very high in Kansas. Besides that, unlike the laws in many other states, Kansas payday loan laws do not also make it mandatory for the lender to allow borrowers to repay the loan in several small monthly installments if they are unable to pay in full through a one-time payment. Worse, nothing has been said in the state law code of Kansas about the provisions regarding automatic rollovers and renewals of payday loans, which is one of the major factors that make this type of lending very risky and extremely expensive.

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