Payday Loan Laws in Michigan
Payday loans are often the last resort for individuals who are earnestly seeking to
remedy a pressing financial shortcoming, unscrupulous lenders may easily take advantage
of such intense scenarios. Fortunately, many states have enacted lending laws that
specifically, address this issue and payday loan laws in Michigan highlight
the type of protection and expectations that consumers may have when considering
and actually acquiring payday loans.
It is important to note that payday loans are not available in every state and laws
and regulations vary by state. Information for
Michigan Payday Loans is provided for your convenience.
Just because someone is willing to lend you money does not necessarily mean that
the offered credit extension is completely or even partially legal. The combination
of desperately needed cash and the often small amount of payday loans, however,
may be the overriding concern for applicants. Payday loan laws in Michigan
denote the legal status of these brief loans, but they are legal within definitive
parameters. In Michigan, a maximum of six hundred dollars is the legal limit set
for payday loans, with a term of no more than thirty-one days. As there is often
an appreciable default rate with this type of lending, the limited dollar amount
may protect an otherwise thoughtful applicant from getting into even more of a financial
While paying a ten, fifteen, or even twenty dollar fee to acquire one or two hundred
dollars may sound exorbitant, this is precisely what this sort of cash advance may
cost you. Accordingly, payday loan laws in Michigan also address this issue, namely
as a tiered finance rate and fee system. A maximum finance rate of fifteen percent
may be applied to the first one hundred dollars of a loan, with each hundred dollar
increment that follows being charged one percent less. In addition, a database verification
fee may be applied, and the finance charge for a one hundred dollar loan with a
term limit of fourteen days, for example, would be a flat rate of fifteen dollars.
Accordingly, the annual percentage yield for a one hundred dollar loan lasting fourteen
days would equate to three hundred ninety percent.
Under Michigan law, the maximum number of payday loans that an individual may have
outstanding at one time is stringently defined. As only one outstanding loan is
permitted with a particular licensee, this may curb inappropriate lending as well
as unwise borrowing and helps to avoid payday loan consolidation Accordingly, rollovers are not permitted, meaning that these
types of loans may not be renewed. As long as there are no additional fees involved
a lender may, however, extend the original loan.
Michigan law also delineates the need for an established repayment plan as a means
to further regulate this form of lending. In terms of collection fees, a payday
lender is limited to charging one returned check charge of twenty-five dollars.
Criminal actions are also prohibited, and the state regulating office may be contacted
by phone, fax, mail, or online by consumers seeking further information on licensees,
regulation specifics, or to formally register a complaint.
Take a look at the benefits of applying for Online Payday Loans
if available in your state.