Payday Loan Laws in New Mexico
A payday loan is a cash loan provided for a short term of time. No collateral is required for such a loan as it is based on the lender holding the borrower's personal check for the loan amount plus the added finance charge imposed by the lender. It can also be based on the lender's electronic access to the bank account of the borrower for bad credit from which the lender will debit the loan payment and finance charge at the end of the loan term. Payday Loan Laws in New Mexico allow a borrower to obtain up to $2,500 in one payday loan.
It is important to note that payday loans are not available in every state and laws and regulations to vary by state. Information for New Mexico Payday Loans is provided for your convenience.
Under New Mexico law, the term of such a short-term long may be from 14 to 35 days. With a written agreement between the lender and borrower, it may be for a shorter term but never for longer than 35 days. At the end of the loan term, rollovers are not permitted. The loan payment is due and payable in full at the end of the term. For the convenience of such a loan, the borrower will pay a finance rate of 15.50% and a verification fee of $.50 per each $100 borrowed. On a $2,500 loan, the verification fee would, therefore, be $12.50. There is no limit to the number of such loans a borrower may have at one time, but the total loan amounts outstanding at any one time is capped and may not exceed 25% of the borrower's gross income monthly.
A repayment plan may be initiated in equal installments to be paid over a 130 day period. Should the borrower's check be returned to the lender for insufficient funds, the lender may charge a $15 NSF fee. The lender may not, however, take criminal action against the borrower. Under New Mexico's Statute Ann. 58-15-32 to 38, borrowers may make any necessary complaint against a lender to the New Mexico Financial Institutions Division in the state government by contacting the Consumer Industry Manager at 1-505-476-4885 or writing to 2550 Cerrillos Road, 3rd Floor, Post Office Box 25101 in Santa Fe, New Mexico, 87505.
Payday lending is regulated by the state of New Mexico to protect the borrower. Such a loan is a high-cost transaction and care should be taken to repay any loan promptly, to avoid further finance charges. All borrowers need to understand that this is an expensive source of loan money and the shorter the term of the transaction, the higher the average percentage rate (APR) will be. The advantage of such a loan for the borrower is the ability to obtain cash very quickly and without the lender conducting a full and time-consuming credit check on the borrower. All a borrower needs to be able to qualify for this type of short-term loan is a bank account that is open and in good standing, a steady income source, and personal identification.