Payday Loan Laws by State

Payday loans are regulated differently in different states of America due to the fact that all these states have different views on the operation of such businesses. In this respect states are divided into permissive, hybrid and restrictive ones (in accordance with the the PEW Charitable Trusts research ).

15 states refer to restrictive group. Georgia is one of them - it prohibits payday loan operation on its territory because the loan rates are very high.

In case of New York - payday lenders are restricted up to 25% of APR by the state usury statutes. In the state of New Jersey the APR equals 30% which is not much higher and in fact closes all the doors to profit and makes the entire business senseless for lenders in this state.

The situation is pretty much the same in other states that do not follow permissive payday loan policy. Arkansas sets 17% cap, Arizona - 36% APR plus 5% in fees, Connecticut - 30.03% with variations, Maryland has interest rate cap as of 2.75% and APR – 33, Massachusetts - 23% APR with an administration fee of $20. In North Carolina lenders are restricted to the same 36% APR. Pennsylvania has a $9.50 cap for every $100 loaned annually. In the state of Vermont APR limit is 18%. West Virginia allows charging 31% APR for $2,000. The District of Columbia has a 24% APR cap.

Since payday loans are not governmental loans and they allow lenders to gain a lot of profit, frequently out of thin air, as opponents say. This is the reason why more and more states take payday lending regulation into their hands and tend to get more and more restrictive.

It might seem strange why the industry seems to be requiring much more regulation than car title loan or pawn shows or the like; however, taking into consideration that the major segment of payday borrowers are low and middle income families and individuals (who frequently have financial problems) it is only natural from on the part of the state to try and protect their citizens from the possibility of unfair lending practices.

Surely, payday lenders offer their online services in the majority of the states across the country. However, it is very important to check the lender that you are going to deal with in advance. We at cooperate with reputable and fully licensed lenders who comply with the laws and charge the exact amount they are allowed in accordance with the state guidelines.

Payday loans are more expensive, this is not news; however, they are also the most convenient option for many people across the country and they are especially useful to those whose credit is not perfect. The APR and interest rates are much higher than one expects in traditional long-term lending; however, the benefits are also evident. Payday loans are a great option for individuals with financial emergency problems; and with the assistance from a legal reputable payday loan company even the most dreadful emergency can be handled without headache.