Posts Tagged ‘payday loan laws in Nebraska’

Nebraska Payday Loan Laws

As per Nebraska payday loan laws, it is quite legal for check casher agencies and other financial institutions to offer short-term cash advances at triple-digit APR (annual percentage rate). However, there are still certain restrictions that have been imposed on lenders in an attempt to protect the rights and interests of consumers. The restrictions have been designed in a way to make sure borrowers do not end up getting caught into a never-ending viscous cycle of debt. But, despite all those restrictions, it is very important for you to keep in mind that payday lending programs are still quite an expensive option to borrow some instant cash for a very short period of time. Borrowing payday loans in the state of Nebraska is not at all a wise financial move, especially when there are so many better alternatives available out there, such as borrowing small loans from credit unions, taking an advance from your employer, and other such options. Following is a brief rundown on some key points of the state laws that regulate payday lending.

Maximum Limit On Collection Fee

Nebraska payday loan laws have imposed a certain maximum limit for collection fee, which is $15. If a loan account goes into collections, the lender cannot charge more than $15 as NSF fee.

Criminal Action Can Be Permitted

Though the majority of other states in the United States of America do not permit criminal actions against those borrowers who fail to make the repayment in time, no such provisions have been specified under Nebraska laws. It means lenders may choose to file a criminal lawsuit against you if you do not pay off the loan within the set due date. In some cases, where the amount of the outstanding debt is very high, you may even be sent to jail. However, it is important for you to understand that lenders do not get any benefit when you go to jail. That is the reason lenders rarely chose to go the legal way. They will instead simply try to scare you with threats of jail term and criminal lawsuits, but they are very unlikely to go that way. Besides that, since many payday loan companies are doing their business online without any legal license to offer such loans in your state, they will always try to avoid the legal road. In any case, you should always remember that the Fair Debt Collection Practices Act apply in the state of Nebraska also, which means you have the legal right not to be harassed by your lender in any manner – be it physically, verbally, or psychologically.

No Rollovers

The best thing that Nebraska payday loan laws have done in the interest of borrowers is that they have strictly prohibited any provision for automatic rollovers or renewals or refinance. It means if a borrower fails to pay off the loan on the set due date, the lender cannot force him/her to accept another loan to pay off the previous one. Many lenders in such cases extend the due date for one month or so in order to allow the borrower some extra time to make the repayment, but the hidden catch behind this “convenience” is that they charge interest for the extended period of time, again at a 3-digit APR, which eventually causes the outstanding balance to multiply very fast, and within, just a few months, the burden of debt become too much to repay. The good news for the residents of Nebraska is that any such unfair practices are completely illegal in this state. On nonpayment of debt on the set due date, the loan account should simply be sent to the collection department; no additional interest or other financial charges can be charged on the same except a one-time NS fee.

APR And Other Fee

As per Nebraska payday loan laws, the annual percentage rate on a $100 of payday loan issued for a repayment period of fourteen days can be as high as 459%. Alternatively, the interest can be charged as a flat $15 on every $100. Besides interest, other financial charges are also allowed, which can be as high as $17.65.

Maximum Amount Of Loan And Maximum Number Of Loans

Any borrower in the state of Nebraska cannot have more than two outstanding loans in his/her name at any given time while the maximum loan amount (per loan) must not exceed $500.

Repayment Period

Though there are no restrictions on the minimum repayment period, but the maximum repayment term cannot be more than thirty-one days.

If you have any complaint against your payday lender or just want to get more detailed information about the Nebraska payday loan laws, you can contact the Nebraska Department of Banking & Finance. You can call them at (402) 471-2171 and visit their office at Financial Institutions, 1230 ‘O’ Street, Suite 400 P.O. Box 95006 Lincoln NE 68509.

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