Payday Loans

Ohio Payday Loan Laws

Though payday lending is legal as per Ohio payday loan laws, lenders are strictly prohibited from charging extremely high rate of interest on short-term cash advances. If a payday loan company is charging you 3-digit annual percentage rate (which is quite common in majority of other states), you can file a complaint against them with the Ohio Division of Financial Institutions. You can call them at (614) 728-8400 and visit their office at 77 South High Street, 21st Floor Columbus OH 43215.

No Criminal Actions On Non-Payment Of Debt

The non-payment of payday debt in the state of Ohio is not a criminal offence. Though the borrower has the legal obligation to make the repayment on the cash advance borrowed, lenders do not have an option to file a criminal lawsuit against the borrower for this. However, Ohio payday loan laws allow them to file civil suits against the borrowers who are not repaying their debts.

Collection Fees

When a loan account goes into collection status, lenders can charge different types of collection fees that include court costs after default, collection charge of $20, and any other bank charges that have been disclosed in the loan contract.

Repayment Plan YES; Rollovers NO

No rollovers are permitted in Ohio, which is definitely a great relief for the borrowers. Unfortunately, there are many lenders in this state (or the ones that operate their business from Internet) are still engaged in such practices, where they renew the loans when the borrowers fail to make the repayment on the set due date. If you are also being harassed in such a manner, you must use your legal right and file a complaint against those lenders. It is important to note that even if you have borrowed from Internet-based lenders that have no offices based in Ohio, your state laws are still applicable because you are residing in this state. The rollovers or renewals or refinance or any attempt to extend the loan term (such as by issuing a new larger loan so that the borrower can repay the previous loan) are strictly prohibited. If the borrowers fail to meet the due date, the only option available for the lenders is to offer an affordable repayment plan to them. Ohio payday loan laws have made it mandatory for lenders to allow those borrowers (who are having difficulty in making the repayment) an option to repay the outstanding loan in small installments within a period of sixty days. The important point to note is that no extra charges or interest can be charged for this 60-day period.

Number Of Outstanding Loans

A borrower cannot have more than one outstanding payday loan in his/her name at one time. However, the state laws allow them to have a maximum of four loans per year. It means you must pay off the first loan in full in order to be able to borrow a second cash advance. Besides that, Ohio payday loan laws also restrict the maximum number of outstanding loans in an individual’s name to two within a period of ninety days. Even if you have repaid both the loans in time, you will have to wait till your quota of ninety days passes. It is also the responsibility of the lenders to do a thorough verification whether a borrower qualifies for another loan or not.

Interest Rates And Finance Charges

As per the laws applicable in the state of Ohio, payday loan companies cannot charge more than 28% per annum as interest on short-term cash advances. Even the maximum limit on finance charges is also very low. Lenders can charges up to $1.08 as finance charges on every $100 of loan issued for a 14-day period. It means if you borrow $200 for fourteen days, you will have to pay up to $203.3 only, which includes $2.15 and finance charges of $1.08.

Maximum Limit On Repayment Period And Loan Amount

As per Ohio payday loan laws, the repayment period offered to the borrowers must not exceed thirty-one days. The maximum amount of loan can be up to $500.

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One Response to “Ohio Payday Loan Laws”

  1. james says:

    A good informative article from the state of Ohio. The state law says that lending is not illegal but simultaneously lenders can not charge high interest. If anyone offers you loan on high rate of interest i.e in hundreds per annum, you can go against the institution through state authorities. If you take a loan it is you moral responsibility to pay back the same in due time however if you fail to do so it has not been described as a criminal activity in the law whereas a civil case can be filed against you. Lenders can charge collection fee if loan is not paid in due time. No rollover of the loan in any form is allowed .There are some companies which are operating out of the state through web are offering rollover or increase in payback term ,which is illegal and these companies are also governed by the same law. These companies can offer an easy repayment plan in small installments. One loan per borrower has been fixed and the lending houses are advised to enquire about the borrower’s eligibility for loan. Maximum rate of interest and charges have been fixed on cash advances.

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