The State of Delaware Guide to Payday Loans

Payday loans are not legal in all 50 states. That is because financial advisers generally tell people to stay away from short term loans with very high interest rates. As a matter of fact, in some states where payday loans are legal, strict regulations govern them. One state where this type of loan is regulated is Delaware.

Although warnings about them abound, people still seem to think that the payday loan is still a viable option if they need some quick cash. For those who are in a bit of a financial pickle and are forced to get a payday loan for some financial support, it pays to know everything about the loan that you are hoping to get. To help you out, use this guide to get to know most things about the laws governing payday loans in your home state.

A payday loan is a short term, high interest loan whose accessibility makes it enticing to would be borrowers.  It is easily accessible because to acquire this loan, one needs only a few requirements – a bank account in good standing, a steady source of income, and valid identification. Establishments that are willing lenders also abound. A would be borrower can easily get payday loans from payday loan stores, check cashers and pawnshops.

Loan Terms
Delaware regulations only allow prospective borrowers a maximum loan amount of $500. Unlike in other states, the maximum loan amount is not dictated by or limited to a certain percentage of the borrower’s gross monthly income. Gross monthly income refers to the borrower’s monthly salary before taxes have been deducted.
The loan term is at a maximum of 60 days, meaning the principal loan amount plus finance charges have to be paid within that period of time. The maximum finance rate that can be imposed on payday loans in the state are not specified, as well as fees included when processing the said loans.  There are also no limits to finance charges and Annual Percentage Rates (APR) for 14-day $100 loans.

Debt Limits
The number of outstanding loans allowed per borrower is not specified. There is, however, a $1000 limit aggregate loans that can be outstanding to multiple lenders. A maximum of four rollovers are permitted. A rollover is the act of paying only the interest allowing the principal loan amount to rollover and be paid on the borrower’s next payday. Whether there is or there isn’t a cooling off period in between loans is not specified. Options for repayment plans are not specified as well.

Criminal action is prohibited against borrowers who fail to make payments. A fee for nonpayment can be collected, but only if expressly specified in the contract. The amount for this fee should not exceed 5% of the loan amount.

How to Get Information or File Complaints
To know more about payday loans, you can visit or call the regulator, which is the Delaware Office of the State Bank Commissioner. They are located along Loockerman Street, Dover DE 19901 and can be contacted via landline (302) 739-4235 and fax (302) 739-3609.


Leave a Reply