Payday Loans

Utah Payday Loan Laws

As per Utah payday loan laws, payday lenders must be duly registered with the Department of Financial Institutions in order to be eligible to issue short-term cash advances to the consumers residing in this state. The laws also require them to disclose all terms and conditions clearly in the loan contract not only in writing but also verbally. There must not be any hidden clause. Consumers are also advised to read the fine prints thoroughly before they sign it.

Federal Laws Are Applicable

There are certain federal laws that payday loan companies in the state of Utah must abide by. For example, they must comply with the Regulation Z of the Truth in Lending Act. The loan agreement must display the basic loan terms clearly, such as the annual percentage rate (APR), the amount of finance charge, the repayment period, and other such things.

State Laws: Important Points

The Department of Financial Institutions is the regulating authority in this state that enforces the following Utah payday loan laws. The department also reviews the business operations of each and every payday loan company who is offering short-term cash advances to the residents of this state. Following are some important points regarding the state laws that you must be well aware of.

- If you are in default and so your loan account goes to the collection department, you have the right to ask your lender not to contact you or your employer while you are at work.

- If the post-dated check given (by you) to the lender gets dishonored because of insufficient fund in your bank account, your lender cannot bring criminal proceedings against you. Lenders are strictly prohibited from giving any such threats to you.

- Utah payday loan laws allow a maximum ten weeks (from the date when the loan was initially issued) of rollover of a loan balance after default. You can get a due date extension of up to ten weeks, during which you will be charged at the same APR (usually in three digits). However, after this 10-week period collapses, no further interest can be charged.

- The loan contract must also include the phone number of an authority (from the payday loan company), where borrowers can file their complaints (if any). Alternatively, borrowers can contact the Department of Financial Institutions at (801) 538-8830.

- The schedule of fees and other finance charges must be explained clearly in the loan contract, including the dollar amount of the fees and in the form of annual percentage rate.

Actions That Lenders Can Take On Non-Payment Of The Debt

If you default on a cash advance, Utah payday loan laws allow lenders to take the following actions against you.

- They can list all your accounts in default to various credit bureaus, which may eventually make it difficult for you to get credit in future.

- They can charge at least $20 in the form of NSF fee (Non-sufficient fee)

- They can also file a civil suit against you and seek judgment from court. If the court judgment comes against you, the lenders may be allowed to recover reasonable attorneys fees and other court costs from you. Besides that, the court may also order you to pay off the outstanding balance at the federal rate plus an additional two percent. The current federal rate is 2.99% per annum.

Contact Numbers For Help

If you want to get more detailed information about Utah payday loan laws or want help of a financial counselor so that you could pay off the mounting payday debt that is outstanding in your name, you can contact Utah Consumer Lending Association at (801) 328-1888 or the Department of
Financial Institutions at (801) 538-8830.

Overall, though many specific legal provisions have been made to restrict the predatory nature of payday lending programs in the state of Utah, no solid efforts have been made to restrict the sky-high interest rate that lenders usually charge on short-term cash advances. Utah payday loan laws have not imposed any maximum limit on the repayment period, interest rates (APR), finance charges, or the amount or number of loans that can be issued to a single borrower at one time.

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