Payday Loans

Minnesota Payday Loan Laws

Unlike the majority of other states in the United States of America, Minnesota payday loan laws say nothing about whether the criminal lawsuits can be placed against those borrowers who do not pay their loan off within the set time limit. It means there is nothing much you can do against those payday creditors who are threatening you with criminal lawsuits. However, it is important for you to keep in mind that the Fair Debt Collection Practices Act applies in the state of Minnesota also, which means you still have the right not to be harassed by your lenders – neither verbally nor physically nor psychologically. Besides that, though lenders may have an option to file a criminal lawsuit against you if you are not paying the debt in time, they rarely choose to use this option. This is because there are certain other laws applicable in Minnesota that are very strict against payday lenders.

Collection Fees

The collection fees can be charged just once and the amount of fee must not exceed $30.

No Rollovers

As per Minnesota payday loan laws, payday lenders are strictly prohibited from rolling over or renewing the loans in case of nonpayment of the debt. It means there is no way the lenders can push you into a viscous cycle of debt. Besides that, if you don’t pay the loan on the set due date, the lender cannot6 force you to borrow another loan and pay off the previous one. However, there’s a catch here. The state laws prohibit you to borrow another loan from the same lender to pay off a previous outstanding loan, but you still have an option to borrow from another lender and then pay off the previous outstanding loan that you owe to a different lender. But again, no one can force you to use that option. You are strongly advised never to borrow another high-interest cash advance just to pay off a previous high-interest cash advance; doing that is one of the worst financial moves a person can ever make.

No Limit On Maximum Number Of Loans

Minnesota payday loan laws have not imposed any maximum limit on the number of outstanding loans you can have at a time. It means there is nothing illegal if lenders are offering you cash advances while you already have a certain number of outstanding payday loans in your name. if you push yourself into the quagmire of payday loan debts by borrowing multiple loans at a time, you will be responsible for your own action; you cannot hold your lenders responsible for it.

Interest And Other Charges

Despite a few strict legal restrictions that the state of Minnesota has imposed on payday lenders, it has done nothing to reduce the extremely high interest rates that lenders often charge on such short-term loans. Minnesota payday loan laws allow a maximum APR of up to 390% per annum on a $100 of loan issued for a repayment period of fourteen days. The rules for the interest charges are as follows – $5.50 on the first $50, 10% plus additional $5 on loan amount between $51 and $100, 7% (minimum $10) plus an additional $5 on loan amount between $101 and $250, 6% plus an additional $5 on loan amount between $251 and $350.

Maximum Loan Amount

Lenders cannot issue more than $350 of payday loan on a single account. Though a single lender cannot issue you another loan if you already have an outstanding loan from them, you can borrow more than one $350 of payday loans from different lenders at a time.

Limit On Additional Interest Charge After Default

Though rollovers are not permitted under Minnesota payday loan laws, lenders are allowed to charge an additional interest up to 2.75% per month on that loan.

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