Posts Tagged ‘payday loan laws in South Carolina’

South Carolina Payday Loan Laws

South Carolina is one of those states where extremely high rate payday lending programs are still legal. However, South Carolina payday loan laws have imposed certain restrictions on the lenders, which is definitely a welcome move and highly beneficial especially to those who are already trapped into the viscous cycle of payday debt in this state. Whether you are borrowing from a state-based or Internet-based payday loan company, the following laws are applicable as long as you are a resident of the state of South Carolina.

Collection Rules

It is usual for the majority of payday lenders to charge very high collection fees, especially when the post-dated check given by the borrower gets dishonored due to non-sufficient fund in his/her checking bank account. However, it is important to note that South Carolina payday loan laws do not allow lenders to charge more than $10 as non-sufficient fund fee or the actual charge (as disclosed in the loan contract), whichever is lesser.

Lawsuits

Payday lenders offering short-term cash advances in the state of South Carolina are also strictly prohibited from filing any criminal lawsuits against the borrowers even if they are unable to make the repayment. Non-payment of payday debt is not treated as a criminal offence in this state and so you cannot be sent to jail for this. But yes, lenders have the right to file civil lawsuit against the borrowers, where in extreme cases, the judge may order for wage garnishment or sale of certain assets that you own or any other such actions in order to help the lender get their money back. However, it is very important for you to keep in mind that lenders cannot garnish your wages or force you to sell some of your assets unless there is a court order for the same. In fact, even if there is a court order, a court-appointed trustee looks after the process, not the lenders. Since, the Fair Debt Collection Practices Act applies in South Carolina as well, you have the right not to be harassed by your lenders.

File A Complaint If You Are Getting Harassed

If any payday loan company is not abiding by the South Carolina payday loan laws or if they are harassing you through unfair practices, you can file a complaint against them with the South Carolina State Board of Financial Institutions, which is the main authority to regulate matters relating to payday lending in this state. You can fax them at (803) 734-2025, call them at (803) 734-2020, and visit their office, which is located at Consumer Finance Division, P.O. Box 11905 Columbia SC 29211.

No Rollovers, No Renewals, No Refinance, No Debt Consolidation

There is no way you can be trapped into a viscous cycle of payday debt through rollovers or renewals or debt consolidation or due date extension or any other such things. If you fail to repay the loan on its set due date, your loan account will straightaway go to the collection departments, where no further charges can be added in the form of interest or other fee to your outstanding debt balance (except the collection fee up to a limit that has been mentioned above). Though South Carolina payday loan laws do not make it mandatory for the lenders to offer an affordable repayment plan to such borrowers, you still have a fair chance to get such convenience, especially if you send a decent repayment proposal to them. They may offer some changes in the proposal or offer a new plan altogether.

No Limit On Maximum Number Of Loans At A Time

The bad news is that there is no maximum limit on how many outstanding payday loans you can have in your name at one time. It means there is nothing illegal if lenders encourage you to take new loans, such as to pay off your previous loans). This is a big catch and must be seen as an alternative to rollovers and renewals. When you keep on borrowing new loans just to pay off the previous dues, it will eventually push you deeper into a viscous cycle of debt. No one can force you to take a new cash advance. You are strongly recommended to avoid such stupid financial moves. If you having difficulty in repaying the loan, get help from legal authorities or try better alternatives. Always remember, they are not going to put you into jail if you are unable to make the repayment.

Basic Loan Terms

As per South Carolina payday loan laws, a payday lender cannot issue more than $300 per loan account. However, there is no limit on how many loans they can issue to a single borrower; they can issue as many as they want as long as the borrowers agree to take the same. The state laws allow lenders to charge a whopping 390% per annum as APR (annual percentage rate). Besides that, they are also allowed to charge up to $15 as various finance charges on every $100 of loan issued for a 14-day period.

Repayment Period

South Carolina payday loan laws also impose a maximum limit on repayment period, which is thirty-one days.


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