Whilst regulations on payday loans vary state-by-state, in general, payday loans can be for any amount between $100 and $1,000 and most states set their own limits on the length of time the loans can be for, although in the US the average loan term is about fourteen days. Typically, the shortest-term loans face the highest interest rates and charges, with the charges often ranging between $15 and $30 to borrow just $100.
In the states in which payday loans are legal, you can borrow the money from the likes of pawn shops, payday loan stores, toll-free telephone lines, check cashing stores and even some rent-to-buy stores. It doesn’t take much to be approved for the loans, either, as generally all you’ll need is some form of ID, a working and open bank account and a regular source of income or cash flow. Unfortunately, because the payday loan lenders don’t carry out credit rating checks or give questions to assess a borrower’s ability to repay the loan, a lot of people end up taking out a payday loan that, once added onto the staggeringly high interest rates and charges, they can’t actually afford to pay back at the end of the agreed loan term. They then find themselves having to take out additional loans to pay off previous ones and end up deep in debt. It’s because of this very real danger that it’s important for people to read up on the rules and regulations regarding payday loans in their state.
In the state of Oregon, laws permit payday loans to be provided and borrowed, and the laws do not outline a maximum limit on the amount to be borrowed, although they do set a limit of thirty-one days on the loan term and a maximum interest rate of 36% APR (annual percentage rate). The largest fee that can be charged is $10 for every $100 borrowed, up to a maximum of $30 in total. There is no limit set for the number of outstanding payday loans a borrower can have in Oregon, but only two renewals are permitted on the loans. There is a 7-day cooling-off period, with no further loans being permitted until seven days have passed since the end of the last loan. If a borrower fails to pay back the loan in full by the end of the loan term, they can face one $20 non-sufficient funds fee and additional bank charges. Payday loan lenders are forbidden from pressing criminal charges on borrowers, although civil penalties can still be applied.
The regulatory body for small loans and payday loans in Oregon is the Oregon Department of Consumer and Business Services and the person to contact about loans is Michael McCord, Program Manager, Financial Services. To ask any questions or to complain, write to the Division of Finance & Corporate Securities at 350 Winter Street NE, Room 410, Salem, OR 97301 or alternatively, call them up on (503) 378-4140.