Payday loans are 100% legal in some states. You can apply for a payday loan in banks, lenders, check cashers and pawnshops in some states but not in Mississippi. While you have the option to apply for the short term payday loan in Mississippi, you can do so only at check cashers.
Payday Loans: Somewhat Legal
Payday loans in Mississippi are somewhat legal. One can apply for a payday only at business entities that encash check. It is definitely better than having payday lending prohibited.
If you want to apply for a payday loan, note that that maximum amount varies from person to person because it depends on your paycheck. The loan terms also vary according to the amount. If you borrow $250, you have to pay it in a maximum of 30 days. For loans higher than $250 but not exceeding $500, the maximum payment time may be only 28 days.
License for Check Cashers
Not all check cashers are automatically approved by the state to offer payday loans. They need to be registered with the state’s secretary. They also need to apply for a license that costs $750 and $475 to renew. The check cashers also need to provide surety bond or cash worth $10,000, a set of fingerprints, felon-free for the last 10 years, and net worth of at least $20,000.
Laws on Finance Rates
Since most people would apply for payday loans during financially hard times, it is only reasonable that the finance rates are capped. In Mississippi, the maximum finance rate for loans under $250 is $20 for every $100. The same rate applies for 14-day $100 payday loans that have 520% APR. The rate will be increased to $21.95 for every $100 for loans of $250 to $500.
This helps since the goal of most state laws on payday loans is to cap or limit the interest rates in order to protect the consumers. By limiting the finance rate to $20 to $21.95 per $100 loan, consumers can enjoy better financial help.
Rollovers and Extensions
If you are not sure that your paycheck will be enough to pay the loan and cover the household expenses, better not apply for a payday loan at all. The laws on payday loans in Mississippi prohibit rollovers and extensions.
Many lenders especially the ones that operate online break the laws on rollovers and extensions. Many of them would automatically extend a payday loan after deducting the interest from the borrower’s bank account. Others would roll the loan over to accumulate more loans. Fortunately, there are laws that prohibit these activities among payday loan providers in Mississippi.
Collections on Default Loans
Lenders would have to contact collection agencies for default loans. The latter can collect only NSF fees. However, the court may award additional fees.
Monitoring and Regulation
The payday lending industry in Mississippi is monitored and regulated by the state’s Department of Banking and Consumer Finance.
If you need a low quick loan, a payday loan is not a bad option. However, be sure that you or the lender/check casher is not breaking any of the laws on payday loans in Mississippi.