Payday Loans

Missouri Payday Loan Laws

Though certain restrictions have been imposed on payday lenders under Missouri payday loan laws, they are of almost no use. Short-term cash advance programs in this state are designed with ‘great care’ to allow lenders to suck borrowers financially so deep and so hard that they either end up transferring a fortune of fund to the lender’s pocket or end up going bankrupt. You can realize how unfair and costly payday loans are in this state with the very fact that lenders are legally allowed to charge interest at a whopping 4-digit APR. Besides that, even rollovers are permitted for a certain number of times. You are advised never to borrow these loans in Missouri; it will not only ruin your finances but it will also make it almost impossible for you to get rid of your debt problems. Following are some important points of the laws (or lawlessness) in this state when it comes to regulating predatory payday lenders.

Stopping Payment Or Closing Your Bank Account To Avoid Automatic Withdrawal From Your Account Is A Criminal Offence

Missouri payday loan laws have closed virtually all doors for you to escape from your payday debt problems. Though in other states, lenders have been prohibited from taking criminal actions against those borrowers who are unable to repay the loan and so either issue a stop payment request or close their bank account to avoid the risks of wage garnishment or automatic withdrawal by the lenders. In those states, borrowers can do such things without any problem as long as they inform the lenders in advance about their actions. In Missouri, however, such activities are treated as a serious criminal offence and you can even be sent to jail for it. The only way to avoid this problem is never to issue a post-dated check to the lender or authorize them to withdraw fund from your bank account.

Collection Fees

Missouri payday loan laws do not only allow a 4-digit APR on short-term cash advances, but they also allow lenders to charge various finance charges and collection fees additionally, such as ‘reasonable’ attorney’s fees (what is reasonable is up to the lender to decide), NSF fees, and court courts. The only legal restriction the state laws have imposed is that they have strictly prohibited payday lenders from charging check-bouncing fees again and again by trying to collecting a the same check again and again. Any post-dated check that a borrower issues to the lender must not be sent for collection more than once.

Rollovers Are Permitted

The provision of automatic rollover of loans is one of the major factors that push the borrowers into a never-ending cycle of debt. Though laws in the majority of other states have strictly prohibited rollovers or renewals, Missouri payday loan laws still allow lenders to renew the loans for up to six times if the borrowers fail again and again to pay off the outstanding balance in full; it is just that every renewal must reduce the principal amount by at least 5%.

Repayment Plan Is Not Mandatory

The state laws have also not made it mandatory for the lenders to provide any repayment plan to the borrowers who are unable to pay off the outstanding dues because of financial hardship. Though you can still request them for the same but that request is very likely to be dishonored.

Interest And Other Fees

Missouri payday loan laws leave it up to the lenders and borrowers to decide through a loan contract that how much interest will be charged on the loan issued. The laws have set the maximum ceiling on interest as 75% on a $100 of loan issued for a 14-day period. Besides that, they can also charge $75 as other finance charges. So, if we calculate the APR, it can be a whopping 1980% per annum or sometimes even more.

Maximum Loan Amount And Repayment Period

The repayment period must not be less than fourteen days and more than thirty-one days. The maximum loan amount that can be issued on a single loan account must not exceed $500. But, Missouri payday loan laws have set no limit on how many outstanding loans a borrower can have at one time.

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Posted in Payday Loan Laws, Payday Loans | 1 Comment »

One Response to “Missouri Payday Loan Laws”

  1. Robert says:

    Missouri state has so many restrictions about the pay day loan but it does not seem to be beneficial for the borrowers. These restrictions are not enough to stop the creditors from taking huge amount as interest from the borrowers. They are legally allowed to charge 4 digit APR from the poor consumer of their pay day loan. The creditors are even liable to do the roll-overs. If you are a resident of Missouri, it will be good for you. Never go with the option of taking short term cash advance as it will finish your finances and you will find yourself alone surround with multiple debt only. In the state of Missouri, criminal case can be filled against you in case of your ability to do the repayment in time. You are not liable to close your bank account; so many other charges can be taken from you at the name of different types of fees. It is not even compulsory for the creditors to suggest you a reasonable repayment plan in case of financial emergency. Creditors and lenders can decide the interest rate, time period, number of loans etc. There is nothing to worry about the laws in Missouri.

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