Payday Loans

Montana Payday Loan Laws

As per Montana payday loan laws, payday lending is not just legal in this state but even extremely high rate of interest (in 3-digit APR) is also allowed. Still, things here are not that horrible as they are in many other states in the United States of America. The state laws have imposed certain legal restrictions on payday lenders in order to provide better protection to the borrowers against the predatory nature of short-term cash advance programs. If you are not sure about your legal options or want to file a complaint against your lender, you can contact the Montana Department of Administration, which is the regulatory authority for payday lending in Montana. You can fax them at (406) 841-2930, call them at (406) 841-2920, and visit their office at Division of Banking and Financial Institutions, 301 South Park, Suite 316 P.O. Box 200546 Helena MT 59620.

No Criminal Actions Can Be Taken Against Borrowers

Payday loan borrowers in the state of Montana are safe, as Montana payday loan laws strictly prohibit lenders from taking any criminal action against those who are not paying their debt on the set due date. Borrowers are even allowed to request ‘stop payment’ or just close their bank account in order to restrict access of their bank account to the lender. It is just that a written must be sent to the lenders in advance informing them that you are going to close your account and that you will pay off the outstanding balance as soon as you arrange the fund. You do not need to seek their permission; you just need to send them a letter of information. Non-payment of debt in this state is a civil offence and you cannot be sent to jail for this. Lenders can file civil against you, but that is also very unlikely because payday lenders often try to avoid legal troubles. Therefore, if you are looking out for ways on how to get rid of the payday debt troubles you are in, you should stay calm and pay no attention to the threats of legal actions by lenders. The chances are that they will soon offer you an affordable repayment plan (or accept your proposal if you send one) to get their money back. Though repayment plan is not mandatory, but lenders often accept such proposals in Montana, but things will depend on how educated you are about the laws and how well you can negotiate with them.

Collection Fees

When you default on a loan, Montana payday loan laws allow your lender to charge an array of collection fees that may include reasonable attorney fee (if disclosed in the loan contract), court costs, and a one time NSF fee of $30.

No Automatic Rollovers

Another good news for the borrowers is that the state laws have also prohibited automatic rollovers or renewals or refinance or extension. Your lender cannot force you to borrow another loan from them to pay off a previous loan. No further interest can be charged on that account.

Maximum Number Of Loans And Maximum Loan Amount

Payday lenders in Montana cannot issue more than $300 of cash advance to a single borrower in one account. Besides that, the borrowers are also requested not to have more than two outstanding loans in their name at one time.

APR And Other Fees

A maximum Annual Percentage Rate of up to 650% can be charged on payday loans in Montana. Besides that, they are also allowed to charge additional finance charges which must not exceed $25 on a $100 of loan issued for a repayment period of fourteen days.

Repayment Period

As per Montana payday loan laws, the repayment period on short-term cash advances cannot be more than thirty one days.

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