Payday Loan Law Introduction:
The law has been made in some States to control and regulate the market of
Pay Day Loans. The things that
one should know before one goes for a "Pay Day Loan" The Pay
Day Loan is something that helps to get fast cash in urgent
You do need a checkbook of your bank account; however there may not be any money in your bank account This has developed into a flourishing business opportunity for many business persons firms and companies, who are ever willing to lend you money. However the new law regulates about how much you could borrow also how much the lender can charge you for the loan, as fee and other services.
Understanding a deferred presentment transaction:
The legal term that describes a kind of borrowing in which a borrower hands
over the lender his personal bank check to be hold up to a determined
date and he gets cash in for this.
Are these loans actually the "payday loans"
The transactions of this type, should be properly registered by the lenders, are treated lawful. As this type of transactions is "loans" in the common sense, their interest rate should t be lesser than 30%. Most of these are termed as "payday loans" as the borrower is agreeing for paying back all the cash taken by him as advance within her next months salary-check.
Florida has passed a new legislation about this type of loan. Not all but a few lenders charged an exorbitant high fees, that they called interest. These operators normally allowed the borrowers for "rolling over" their previous loans that has put the borrower of these loans into even deeper debt.
Limit on charged is fixed by the new law formed
The new law has fixed the fees to be limited only up to ten percent (10 %)
of the written amount of holding check, additionally an amount
of five dollars ($5) can be charged as verification fees (for
verifying the employment and banker details of the borrower).
This ten percent (10%) might not sound like too much, for a
shorter period of time, but these fees always add up to a three
digit if calculated for an APR (annual percentage rate), this
goes up to 291% and some times more than three hundred percent.
The new law demands that the fees should be disclosed on the
application of these types of loans.
Limits on borrowing in the new law!
One can borrow not more than five hundred dollars ($500) for a time period of more than seven days (7 days) and less than thirty one days (31 days). The amount of check cannot exceed $555.00 including the loan amount, the fee and charges of verifying employment and your bank).
In case one needs an amount more than Five Hundred Dollars to borrow, what does the new law says
The loans of this type are not supposed to be the long-term loans. These transactions are designed such that it takes you through an unfortunate unexpected problem that is to tide over a difficult financial period. In the case of your being under a debt burden of more than Five hundred Dollars ($500), this kind of arrangement is not suitable to solve your immediate financial obligations. In this situation you might need to go for formal credit counseling. May be only a debt relief program would give you relief.
Number of Pay Day Loans that one can have at a given time: At the time of taking loan one would be required to certify that he does not have any other running "Pay Day Loans." Additionally, one must have cleared the outstanding loans that are Pay Day Loans before clear 24 hours of applying the new pay day loan. It is duty of the lender to first verify if the borrower has any unpaid loan using the available online database of the State. In vase he finds that you do not have eligible to get a loan, the lender would hand over you a printed out put along with a telephone number to be called in case you disagree with the determination of eligibility.
In case of inability to pay back the loan on the promised time : In the event of your inability to pay your loan on the due date as promised in the beginning, you are duty bound to inform the lender going to him in person. Then the lender, when you visit him in person, would provide you the list of counseling agencies for credit counseling and you have to contact any one of these counseling agencies as a MUST with a period of a week that is with in seven days period. After youre contacting them within the prescribed 7 days AND you have made an appointment with them for a counseling meeting, you would be given a grace period of sixty days, in total and you would not be charged any additional charges for the delayed sixty days period. In this situation the borrower is expected to complete the counseling requirements within this grace period of sixty days. In the event of your choosing to enter into a new repayment plan, you are required to give a copy of the document saying that your counseling is complete with in this period of sixty days, before 60th day.
Here is a caution for the borrower, if the borrower fails to inform or fails
to notify to the lender with in the period of seven days and
he is unable to notify about his completing the credit counseling
with in the prescribed period of 60 days, or in case the borrower
has not been able to make an appointment or has not completed
the counseling sessions within the fixed time required, there
is every chance that the lender would go for depositing or for
presenting the borrowers check for payment with his banker
and might go for pursuing the available legal civil means to
take his money back by forcing the debt.
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