Payday Loans

Michigan Payday Loan Laws

As per Michigan payday loan laws, though it is quite legal for check cashing agencies and other licensed lenders to offer these types of loan programs, there are certain legal restrictions they must follow. The state laws have done nothing much to reduce the extremely high rate of interest that lenders usually charge on short-term cash advances, but they have still imposed certain laws that make things a little less complicated for the borrowers.

No Criminal Actions Can Be Taken Against Borrowers

In the state of Michigan, payday lenders cannot file criminal lawsuit against the borrowers if they are not paying off their debts. Non-payment of payday debt is not a criminal offence unless you have borrowed a huge amount of money through fraudulent activities.

Collection Fees

Michigan payday loan laws have also imposed a maximum limit on the collection fees that lenders can charge. The maximum they can charge is $25 for just one time as returned check charge.


The provision of automatic rollover or renewal of payday loans is one of the main factors that make payday loans very risky for the borrowers. Because of it, consumers often are pushed into a never-ending cycle of debt. But, the good news for the residents of Michigan consumers is that the state laws have made it illegal for the payday lenders to rollover or renew the loans even if the borrower fails to make the repayment on the set due date. The loan account should either sent to the collection department without charging any additional charge except for the $25 of returned check charge. Even if the lenders are extending the due date for the borrower to allow them to repay the loan comfortably, they must not charge any additional interest or finance charges for the extended period of time.

Repayment Plan

Michigan payday loan laws have made things much more comfortable for the borrowers by making it legally mandatory for the lenders to offer an affordable repayment plan. It means if you are having difficulty in paying off your loans, you have the option to request your lender to allow you to make the repayment in several small monthly installments. Your lender cannot deny your request.

Maximum Loan Amount, Interest And Finance Charges

The maximum APR that lenders can charge on payday loans is 390% per annum. The maximum loan amount must not exceed $600. Besides Interest, lenders can also charge certain other fees, which must not exceed $15 on every $100 of loan issued for a 14-day period. Interest can be charged as 11% on fifth and sixth $100, 12% on fourth $100, 13% on third $100, 14% on second $100, and 15% on first $100.

Maximum Repayment Period

As per Michigan payday loan laws, payday loans in the state of Michigan can be issued for a maximum period of 31 days.

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One Response to “Michigan Payday Loan Laws”

  1. Dennis says:

    Any body residing in Michigan state must go through this article. The article is able to provide an accurate picture of the status of pay day loan laws in Michigan. The laws applicable in the state can not do some thing to reduce the sky-high rate of interest but they give some relaxations to the borrowers. The most important thing is that the creditors are not liable to file a criminal case against the debtors unless they find to be involved in any frauds or scams. The worst thing in the case of pay day loans is the roll-overs or the automatic renewal of loans but a person residing in the state of Michigan need not to be worried about that. Because the roll-overs are not allowed here and the collection fee is also restricted to a specific amount, if you are unable to repay your debt. It is compulsory for the creditors to provide you an alternate affordable repayment plan. The upper limit for the loan amount interest and finance charges are also restricted to a certain limit. Michigan state, the laws are applied for the maximum repayment period also. It should not be exceed more than 21 days

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