Learn Some Rules Related to Payday Loan in Different States

A payday advance, also termed as a payday loan is a quick fix to an unexpected or short term financial crunch. There are thousands of companies out there offering loans and payday advance on good acceptable rates. Be sure you are aware of the rules and regulations of these types of loans of the state in which your company lies as rules may differ from state to state. Some are more flexible than the others. Here is a look into the rules of some of the states.

In Washington DC, it is legal for the lender to offer a payday advance provided they have a small loan endorsement to their cheque casher license. The maximum advance that can be taken is $700 for a loan term of not more than 45 days. The finance charge for $100 on a 14 day return basis is $15. However, a fee of 15% applies to a loan of $500 and a 10% rate applied to whatever excess taken over $500 but less than and equal to $700. Moreover, not more than one loan of $700 can be taken, however, if the face aggregate is less than $700 of one advance loan, more may be taken. A loan rollover is not allowed meaning a borrower cannot repay last loan using proceeds of the next. Washington DC also allows borrowers to enter a payment plan at any time so help them repay their outstanding loan money.

Now to clear the point that rules differ between states, let's have a look at California payday industry. California has legalized the system of payday advance. An advance of $300 can be taken for 31 days. Financial charge for a 14 day loan of $100 is 17.65% otherwise a fixed fee of 15% applies. Maximum number of outstanding loans cannot exceed more than one and a rollover is not permitted. A lender may voluntarily enter a payment plan.

Payday loan is prohibited in Connecticut. However, illegal payday advance lenders may charge $17 for $100 up to $600 or $11 for $100 up to $1800. Florida is also one of the states in which this loaning system is legal. A maximum amount of $500 may be taken for 7 to 31 days. A finance charge for a 14 day $100 loan is $15 and a fixed 10% applies to any amount otherwise. Neither outstanding loans nor rollovers are allowed. Payment plans are offered.

So, you can see how important it is to know more about the lending rules of your state. Already being in a tight spot, the last thing you would want is to be charged more than what you are legally bound to. Be careful, and always find an authentic lender to make things easier.