Payday Loan Laws in Pennsylvania
In Pennsylvania, payday loans are prohibited. This does not mean it is impossible for a Pennsylvania resident to obtain a loan. It does mean you need to be aware of the Payday Loan Laws in Pennsylvania, so you can choose an option that is legal.
It is important to note that payday loans are not available in every state and laws and regulations vary by state. Information for Pennsylvania Payday Loans is provided for your convenience.
There are some important facts you need to know. First, companies known as payday lenders cannot operate in this state. Second, companies which provide check cashing services are not allowed to issue payday loans. A third fact is online lenders that do business with individuals in this state must abide by the state laws. Lenders are not exempt from the law simply because they do business over the internet.
Legally, a company can operate as a consumer discount company. While these Payday Loan Laws in Pennsylvania may seem strict or unreasonable, they are in the best interest of the consumer. The person who needs a loan is not as likely to be taken advantage of by unscrupulous lenders charging high rates, or have a large amount of debt from having numerous loans at the same time.
One part of the law states an interest cap of 24% APR. This relatively low rate means a borrower should not have difficulty repaying his loan. A second law covering Pennsylvania loans is the borrower cannot receive a loan if he already has an outstanding loan. However, if borrowers need to renew loans, lenders do have the option of charging extra fees for this service. On the initial $300. of a loan, the fees can range up to 30%. After the initial $300., fees can be up to 7.5% of the remaining loan balance. Total fees cannot be more than $75.
Lenders who deal with consumer lending must be licensed by the state. This includes companies that offer loans over the internet. If the per annum rate is more than 6%, a license must be obtained from the Pennsylvania Department of Banking. This is the department that regulates lending in the state of Pennsylvania.
Residents of Pennsylvania can borrow up to $500. Borrowers must verify that they do not have any outstanding loans. In order to keep fees as low as possible, borrowers should make a point of repaying loans on time. Defaulting on loans will also have a negative impact on the borrower's credit record.
Many people need extra money between pay checks on an occasional basis. Unfortunately, there are payday lenders who try to take advantage of this need by doing business illegally. The good news for consumers is there are companies that abide by laws for both their own sake and that of their customers.There are many companies willing to help, and they are willing to do it legally. Choosing a good company means not being cheated, and not having to file a lawsuit when disreputable companies cheat you out of your money.
Take a look at the benefits of applying for Online Payday Loans if available in your state.