Payday Loan Laws in Massachusetts
The Payday Loan Laws in Massachusetts are some of the strictest payday loan laws in the nation. When explained in the simplest terms, these types of loans are actually prohibited in this state. However, borrowers can sometimes get money quickly by turning to other sources.
It is important to note that payday loans are not available in every state and laws and regulations vary by state. Information for Massachusetts Payday Loans is provided for your convenience.
When consumers need money quickly, one of the easiest things that they can do in most states is to get a payday loan. These loans work within a very simple framework. Basically, the borrower shows the lender their paycheck stub. The lender will then extend a short-term loan to the borrower. In most cases, the borrower will have to repay that money to the lender on the date of their next payday. To ensure that they will receive the money in a timely fashion, the lender will hold a post-dated check from the borrower. Sometimes, the lender will have the borrower sign a form that gives them permission to directly withdraw the money from their checking account on their next payday. Most of these loans also carry hefty finance charges and fees.
Many analysts feel that these fees are unfair to consumers. Thus, the Payday Loan Laws in Massachusetts stipulate that lenders cannot extend so-called payday loans to Massachusetts residents. However, Massachusetts residents can access quick cash by turning to other sources. They may ask their bank to extend them a line of credit, they may see if they credit cards will extend their credit limit, or they may talk to friends or family about borrowing money. In addition, certain check cashiers are able to make small loans if they have been licensed under the terms that were set out by the small loan act in this state.
Once a borrower finds a check cashier who is able to extend them a small loan, they will discover that these loans are also governed by certain rules and regulations. The interest on these small loans must not exceed 23 percent, and the administrative fee must not exceed $20. These loans are different than payday loans for many reasons.
Most payday lenders do not check their borrower's credit scores. However, many small loan lenders will check the borrower's credit history for bad credit. In addition, they may take longer to issue the loan. On the plus side, these types of loans may give the borrower a longer time period to repay the money. In addition to the $20 administrative fee, borrowers may discover that they may have to pay additional fees if they make a late payment or bounce a check.
If a consumer has any complaints about the loan that they are applying for in Massachusetts, they can contact the Massachusetts Division of Banks. They can be reached by mail at One South Station Boston MA 02110 or by phone at (617) 956-1500 or by fax at (617) 956-1599. Consumers should direct their communication to Kevin McNamara. This agency can explain the Payday Loan Laws in Massachusetts to consumers in greater depth. They may also be able to tell consumers which check cashiers are allowed to lend money.
Take a look at the benefits of applying for Online Payday Loans if available in your state.