Living in a state which does not allow a payday loan online company to loan to the residents or banned “brick and mortar” lenders from opening shop, has not deterred individuals from attempts to obtain these short-term loans. If you live in a state which does ban the loans completely or at least heavily regulates the lenders, your access to fast cash can still be made by a transaction with an offshore company, a Native American based lender or by leaving the state.
There are only a few laws which would ban a person from obtaining a loan from another state. There needs to be an understanding that where ever the loan was received, the loan will follow the terms of that state’s regulations. If I live in California but get a loan in Nevada, the terms for my loan will follow Nevada’s regulations. California may have lower interest rate caps, but they will not apply to a Nevada lender. On the other hand, a payday loan online lender has larger access to people out of state, and most will follow the different state regulations. As long as the interest rates, loan caps and fees fall within the other state’s guidelines, a license to serve that state is all that is required.
Each state government has set their own set of rules by which the payday loan online lending industry must follow. Determined lenders and borrowers will find loopholes, but best practices are not showcased with these types of dealings. If your state bans payday online loans, but you find a company who is willing to lend you money, it is a red flag to warn you that you are dealing with a predatory lender and your rights will not be protected under the state laws.
Beware of payday loan online lenders who break regulation rules.
The laws enacted by the states were set up to protect the residents of predatory lenders. For a company to legally loan money without following these guidelines, customer is running the risk of having the lender not follow the collections guidelines as well. The rules are set in order to keep lenders from making harassing phone calls or threats when a loan is defaulted upon. The Fair Debt Collections Practices Act will protect a resident as long as the loan is from a regulated lender. Offshore and Native American based lenders do not lend according to state guidelines, nor do they collect by any either.
Borrower’s best policy.
Do your homework! Understand the current rules of the state in which you live and make sure your lender abides by them. As tempting as it can be, getting a loan which does not follow rules is not responsible borrowing practices. There are many states who have laws currently being worked on, so it is always good practice to know what guidelines your loan will be protected under.
Be honest about your financial information. If you are trying to fool a company into lending you money, you are fooling yourself. In the end, just a few short weeks away, you will be expected to pay off your loan in full or start having interest apply to your account. A payday loan online transaction is an easy process for quick cash which should be taken seriously when it comes to pay off.
