Posts Tagged ‘pay day loans debt trap’

Caught In A Horrible Pay Day Loans Debt Trap? Is Your Lender Following These Rollover Laws?

The provision of automatic renewal of payday loans is one of the primary reasons (other reasons are unreasonably high rates and fees) why many borrowers often end up getting caught into a never-ending pay day loans debt trap. When you do not repay the loan on the set due date, your loan gets automatically renewed generally for one more month. This one-month extension seems to provide you some relief, as you get more time to arrange the fund for the repayment. But, in reality, after one month, the overall outstanding dues grow to a much higher amount because of the sky-high rates and fees that lenders charge on it. If you keep on defaulting, the loan keeps on rolling over and over again, and within a couple of months, it takes the shape of a serious debt trap, coming out of which may look like an impossible task.

Having said that, it is very important for you to keep in mind that almost every state has certain restrictions and provisions regarding rollover of payday loans. If your lender is not following those laws, you can . It is also important to note that there are a few . On the other hand, most of other states where this type of lending is legal have imposed certain restrictions on the maximum number of loans a lender can offer to the same borrower at a time, and whether the loan can be renewed, refinanced, or consolidated or whether the due date can be extended in case the borrower fails to make the repayment in time.

The states where rollovers of pay day loans debt are prohibited have the provision to send all those loan accounts (where borrowers have made defaults) to collections. In most cases, no further charges can be applied except collection fees (which varies from one state to another, but is never more than $30). Besides that, some states have specific provisions for repayment plan also in small monthly installments in order to help the borrower to pay off the debts.

You also need to understand that if, for example, your state allows a lender to offer a maximum of one loan at a time to one borrower and if the lender approves more than one loan and then forces the borrower to make the repayment, it is illegal. Always remember, whenever you find out that a specific lender is violating the applicable state laws, you must file a complaint against it.

Following is a brief rundown on the rollover laws on pay day loans debt that are applicable in different states.

Wyoming (WY)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no specific provisions

How many rollovers are allowed? : None (a lender cannot force repayment, refinance, or consolidation of the loan by using the proceeds of another check)

Wisconsin (WI)

There are no legal restrictions on how many outstanding loans a lender can offer to the same borrower.

How many rollovers are allowed? : There are no specific provisions

Washington (WA)

Maximum number of outstanding loans a lender can offer to the same borrower: A lender cannot hold a check with a face amount of over seven hundred dollars plus fees as applicable (here are the details on ) from any one borrower at any one time.

How many rollovers are allowed? : None (the lender cannot force repayment of a loan with the proceeds of another)

Virginia (VA)

Maximum number of outstanding loans a lender can offer to the same borrower: One

How many rollovers are allowed? : None (cannot refinance, renew, or extend)

Utah (UT)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no legal restrictions.

How many rollovers are allowed? : The lender cannot renew or extend pa day loans debt for more than twelve weeks from the actual date when the loan was approved initially.

Texas (TX)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no specific provisions about the maximum number of loans a lender may offer, but the value of the overall outstanding loans must not exceed $500.

How many rollovers are allowed? : Rollover is allowed in cases where renewal charges are less than the . Otherwise, the outstanding loan must be converted to declining balance installment note.

Tennessee (TN)

Maximum number of outstanding loans a lender can offer to the same borrower: Two (But, a borrower can take a maximum of overall three loans from different lenders)

How many rollovers are allowed? : None (cannot renew or otherwise consolidate)

South Dakota (SD)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no specific provisions

How many rollovers are allowed? : Four times; a lender may flip, rollover or renew loan but only if the borrower keeps on paying at least the penalty charges every time.
South Carolina (SC)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no specific provisions

How many rollovers are allowed? : None

Rhode Island (RI)

Maximum number of outstanding loans a lender can offer to the same borrower: Three, but the total amount of all loans must not exceed the .

How many rollovers are allowed? : One (rollover)

Oregon (OR)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no legal restrictions.

How many rollovers are allowed? : Two (renewals)

Oklahoma (OK)

Maximum number of outstanding loans a lender can offer to the same borrower: Two

How many rollovers are allowed? : None (cannot renew)

Ohio (OH)

Maximum number of outstanding loans a lender can offer to the same borrower: One, four per year

How many rollovers are allowed? : None

North Dakota (ND)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no specific provisions ($600 aggregate loans)

How many rollovers are allowed? : One renewal, but the renewal fee must not be higher than twenty percent of the total outstanding amount that is being renewed.

New Mexico (NM)

Maximum number of outstanding loans a lender can offer to the same borrower: Total capped at 25% gross monthly income

How many rollovers are allowed? : None

New Hampshire (NH)

Maximum number of outstanding loans a lender can offer to the same borrower: One

How many rollovers are allowed? : None (cannot extend, renew, or refinance)

Nevada (NV)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no specific provisions

How many rollovers are allowed? : Lenders cannot extend the repayment period for more than two months from the original due date

Nebraska (NE)

Maximum number of outstanding loans a lender can offer to the same borrower: Two

How many rollovers are allowed? : None (cannot consolidate, refinance, repay)

Montana (MT)

Maximum number of outstanding loans a lender can offer to the same borrower: Two

How many rollovers are allowed? : None (cannot force consolidation, rollover or renewal)

Missouri (MO)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no specific provisions

How many rollovers are allowed? : Six times, but only if the principal amount of the loan gets reduced by at least 5% at every renewal

Mississippi (MS)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no specific provisions

How many rollovers are allowed? : None (cannot renew or otherwise extend)

Minnesota (MN)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no specific provisions

How many rollovers are allowed? : None (Lender cannot force the repayment with proceeds of another loan)

Michigan (MI)

Maximum number of outstanding loans a lender can offer to the same borrower: One with licensee or more than one with any other licensee

How many rollovers are allowed? : None (cannot renew; lender may extend only if it does not charge a fee)

Louisiana (LA)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no specific provisions

How many rollovers are allowed? : None. A licensed lender cannot rollover or renew a loan but may accept partial payment of 25% of amount plus applicable fees and then ask the borrower to enter into a new loan for the remaining outstanding debt.

Kentucky (KY)

Maximum number of outstanding loans a lender can offer to the same borrower: Two ($500 aggregate loans outstanding to all licensees)

How many rollovers are allowed? : None (cannot force consolidation, rollover or renewal)

Kansas (KS)

Maximum number of outstanding loans a lender can offer to the same borrower: Two

How many rollovers are allowed? : There are no specific provisions

Iowa (IA)

Maximum number of outstanding loans a lender can offer to the same borrower: Two

How many rollovers are allowed? : None (cannot force consolidation, rollover or renewal)

Indiana (IN)

Maximum number of outstanding loans a lender can offer to the same borrower: One per lender; total two

How many rollovers are allowed? : None (cannot force consolidation, rollover or renewal)

Illinois (IL)

Maximum number of outstanding loans a lender can offer to the same borrower: Two

How many rollovers are allowed? : None (cannot rollover)

Idaho (ID)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no specific provisions, but the aggregate outstanding dues on all loans must not exceed $1000

How many rollovers are allowed? : Three (renewals)

Hawaii (HI)

Maximum number of outstanding loans a lender can offer to the same borrower: One

How many rollovers are allowed? : None (cannot refinance or consolidate)

Florida (FL)

Maximum number of outstanding loans a lender can offer to the same borrower: One

How many rollovers are allowed? : None (cannot rollover)

Delaware (DE)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no specific provisions but the aggregate outstanding dues on all loans must not exceed $1000

How many rollovers are allowed? : Four (rollovers)

Colorado (CO)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no legal restrictions. But, the aggregate total dues must not exceed $500 and there must be at least a gap of 30-day period between the loans

How many rollovers are allowed? : Renewals OK at a flat 45% interest

California (CA)

Maximum number of outstanding loans a lender can offer to the same borrower: One

How many rollovers are allowed? : None (cannot charge fee for extension)

Arkansas (AR)

Maximum number of outstanding loans a lender can offer to the same borrower: One per location

How many rollovers are allowed? : None (cannot renew or consolidate)

Alaska (AK)

Maximum number of outstanding loans a lender can offer to the same borrower: There are no specific provisions

How many rollovers are allowed? : Two (renewals)

Alabama (AL)

Maximum number of outstanding loans a lender can offer to the same borrower: No limit, but the maximum amount of loans at one time must not exceed $500

How many rollovers are allowed? : One (rollover)

NOTE : In all other states (other than the ones mentioned above), there are no specific provisions regarding rollover of pay day loans debt.


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