Unlike other American states, Nebraska borrowers are protected by statutory laws that regulate payday lending in the state. The rules and guidelines on matters relating to Nebraska payday loans are outlined in the Nebraska Revised Statutes Section 45-904 and Nebraska Statutes Annotated Section 45-901.
The requirements needed for a borrower to avail of Nebraska payday loans are the following: valid identification documents, a bank account with a good standing and a permanent source of income.
Nebraska payday loans are treated as “cash advances”, thus they enjoy exemptions from the usual 16% usury rates. The minimum amount a borrower can get is $100 dollars. This amount will be due for payment for a period of two weeks only. Fees or charges in the loan application are limited to $15 dollars for the minimum amount or pro-rata depending on the value of the loans. Thus, lenders cannot overcharge on the payday loan, nor offer for renewal or rollovers, or accept incomplete payment of the dues.
Likewise, the maximum amount that anyone can borrow is only up to $500 dollars. This amount is also demandable in a month or particularly within 34 days only as prescribed by law. Borrowers are required to pay the amount in full.
Nebraska payday loans cannot be renewed or rearranged into a different mode of payment. However, a borrower can file an application for an outstanding loan only twice at a time for as long as it will not reach the maximum limit of $500 per transaction.
A contract will be drawn between the two parties applicable for a single transaction only. The contract will contain all the information relevant to the borrower, the terms of payment and the fees. However, there is one setback in the policy of payday lending in the state of Nebraska. It is that the lenders are not compelled to release a Truth in Lending Act Disclosure.
The Annual Percentage Rate or APR for Nebraska payday loans will reach as high as, but shall not exceed 459 percent. As usual, the shorter the term of the loans, the higher the APRs become.
On the part of the lender, they are allowed to automatically add the amount of $15 dollars as NSF (Non-sufficient Funds) fee in cases where the borrower doesn’t have enough balance in the bank for the payment of the loan.
For individuals who are interested in establishing a payday loan business in Nebraska, here are the basic requirements needed to be fulfilled prior to approval for operation of the business.
A lender must tender a $50,000.00 bond and will maintain an additional $25,000 for every branch to be opened. The lender should also be a citizen of Nebraska and be physically residing there. There shall be a legal office with a valid business address. Lenders are also required to apply for a license to operate which is renewable annually. License to operate is $500 dollars and an additional of $125 dollars for every branch to be opened. Doing online payday loan transactions is considered unlawful.
For any other matters concerning payday loans, especially for complaints and further inquiries, lenders and borrowers alike are advised to get in touch with the Nebraska Department of Banking and Finance.