Laws on Payday Loans in Missouri – Very Different from Laws in Most States Allowing Cash Advance

If you live in Missouri and need some money before your payday, you are in luck. Payday loans in Missouri are legal and it is one of the states with a high maximum loan amount. Don’t worry because there are laws that can protect you from scheming lenders although these laws also favor lenders in some aspects.

Higher Maximum Loan Amount
Unlike other states where the maximum payday loan amount is around $300, Missouri allows a maximum of $500 for a payday loan online. Nonetheless, this is not the highest maximum amount for a payday loan in the country. The loan term ranges from 14 to 31 days, which matches the standard in the United States.

Higher Payday Finance Rate
Unfortunately, the maximum interest rates are not specified by the state law unlike in other states where a certain amount or percentage of the loan amount for finance rate is indicated. If it is a $100 loan payable in 14 days, the finance rate is fixed at $75. For comparison, the average finance charges in other states range only from $15 to $30 per $100 loan. Nevertheless, banks and lenders cannot charge a finance rate that would go over 75% of the loan amount. In case the lending companies want to collect such finance rate, they would have to specify it in a contract in accordance to the laws on small loans.

Nearly 2000% APR Is Permitted
In addition, payday loans in most states are known for a 3-digit APR even for $100 loan with a 14-day term. Missouri surprisingly allows 1950% APR on $100 payday loans. This is way higher since most payday loans in other states have APR ranging from 300 to 800 percent.

Rollovers Are Allowed

The debt and collection limits for payday loans in Missouri are also very different when compared to laws of other states for similar loans. For instance, it allows multiple payday loans at one time as long as the outstanding loan from each lender should does not exceed $500. The Show Me State also allows rollovers, which is prohibited in many states like California and Michigan. Six rollovers are allowed in Missouri as long as you have already paid at least 5% of the principal amount before any renewal.

Collections Costs Are Permitted
For collection, NSF fees and collections costs are permitted. Court costs and attorney’s fees are also allowed but the lender is prohibited to use several ACH transactions for collecting a check. What’s good is that criminal actions cannot be taken against the borrowers except pay check is returned. This can happen when the maker requests stop-payment or had the account closed.

Regulations of Payday Lending Industry
The payday lending industry is regulated by the Missouri Division of Finance. It is the go-to institution for complaints as well as information on authorized banks, pawnshops, check cashers and lending companies.

The laws on payday loans in Missouri are slack compared to the usury laws of other states. Its maximum loan amount is advantageous for individuals who are in need of a large sum but its high finance rate and APR are definitely on the lender’s favor.


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Missouri Laws on Payday Loans

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