Payday Advances and Your Rights

by: Ignacio Morales


Payday lenders and the loans they issue are bound by federal and state laws. As lenders, they have their set of rights and responsibilities and as a borrower, you are also protected by your rights.

State laws outline the maximum amounts that you can borrow, as well as the repayment schedule allowed. It varies from state to state from a minimum of $500 to $1500. Check your rights per your state, you can easily do a search online and find this information in minutes.

COST OF YOUR LOAN

Before committing to take a loan with a specific lender, the lender must give you all the information regarding the loan. This includes the interest rates and/or the loan finance fees. It is imperative that you fully understand what the loan will cost you.

The costs should also be in your loan agreement or your contract. If you feel uncertain that you will understand everything your lender tells you, then take someone with you who can help you interpret the information.

LOAN TIMETABLES

Lenders must also give you information on their available payment plans and schedules. The information should be available to you during the applications process whenever you need to review it.

You can find this information on the website of the lender, if they have one. Even if a lender has multiple payback options, you should still pay the loan back as soon as you can to prevent more fees.

YOU CANNOT BE THREATENED

When payday loans go unpaid, they may be referred to collection agencies. It is not within the lender's rights to threaten you with criminal prosecution.

You may be taken to civil court where your wages may take a hit, or a lien may be implemented on your assets to pay for the loan. Some states do not allow collection of court costs.

STATE RIGHTS FOR PAYDAY LOANS

As mentioned earlier, the rights given to payday loan borrowers vary by state. For example, Washington State allows you to cancel your payday loan within one day. However, if you applied for your loan online, you may not be able to cancel your loan. This information is found in your state's agencies.

Before you enter into any loan transaction, you must know your rights. Research the lender you are thinking about applying with to make sure they are reputable.

You can also check the Better Business Bureau to see if there have been any complaints about them. If you are looking at lenders online, make sure you know that they are located in your country.

Laws in one country sometimes don't translate to another country. Make sure you understand all the rates and payment plans so you can compare companies. Also make sure you know what all the penalty fees are so you not taken by surprise if something happens and you have to extend your loan.