Posts Tagged ‘pay day loan consolidation’

Ohio Payday Loan Laws – The Short-Term Loan Act Of 2008

With the introduction of Short-Term Loan Act in 2008, Ohio have now become very strict, especially when it is about upper limit of the rate of interest that lenders may charge in these types of lending programs. Prior to this Act, the interest rate could be as high as 300% per annum or even more. But now, as per the new laws, the rate has got an upper ceiling of only 28%. If you are looking out for these loans in the state of Ohio, make sure you do not pay more than 28% of the principal amount in terms of interest and other fees. A lender who is charging more than that is doing an illegal thing. Following is a brief rundown on some of the other things that you must keep in mind regarding the laws in Ohio about these types of short-term cash advances.

Restrictions On Time, Number And Amount Of Loans

By introducing the 2008 Act, Ohio payday loan laws have actually took a serious step to make sure consumers do not become victims of debt traps. Now, the maximum amount of loan you can borrow is $500. Besides that, you cannot have more than four payday loans in a single year. But it does not mean you can have four loans at a time; you can have only one outstanding loan at one time. In order to make sure a borrower does not get more than one loan at a time, there is also a provision for a cooling off period, as per which, a lender can approve another loan to a borrower at least 90 days after the first loan was approved. It is also important to note that the minimum repayment period cannot be less than 31 days.

No Rollover – Borrowers Can Now Pay In Installments

Ohio payday loan laws have also prohibited the practice of rollover, as per which the loans used to be automatically renewed with a hefty amount of penalty charges in case the borrowers would not make the repayment on the set due date. Earlier, lenders would not accept installment payments. Now that the Short-Term Loan Act is in place, it has become legally mandatory for the lenders to accept payment in installments if the borrower is not able to pay the entire amount at a time.  You can arrange for payday consolidation loans.

Loopholes

It is very important for you to keep in mind that there are some loopholes in the Ohio payday loan laws, which many lenders are taking advantage of. Many unscrupulous lending institutions are still charging a very high rate of interest that can go up to 200% per annum or even more. As per the latest reports from Policy Matters Ohio, lenders these days are issuing loans in the form of checks. When the borrowers cash those checks, the lenders charge them a certain amount of money.

Many other laws, such as Ohio Mortgage Loan Act and Small Loan Act, still allow higher interest rates. Therefore, you have to be very careful while you sign up with these lending programs. The more informed you are about the latest Ohio payday loan laws, the better decision you will be able to make.

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