The State of Florida Guide to Payday Loans

Florida is one of the states where payday loans are legal. But, although it is legal, these types of loans are regulated and citizens are regularly advised not to get a payday loan if they can help it. The reason behind this is payday loans have the tendency to lure would be borrowers into what financial advisers call a debt trap, a term used to denote if a person is buried in debt.  Interest rates of payday loans are so high that it is even cheaper to get a cash advance from your credit card, and you know how high CA interests are. However, payday loans remain to be an option for people who need cash in a hurry.

A payday loan belongs to the category of short term, high interest loans. This means that it gains a high interest in a short period of time and should be paid in full when the very short loan period ends. Its popularity is mainly due to its accessibility. These types of loans can be acquired from check cashers, payday loan stores, and even pawnshops.  There are also very minimal requirements needed to secure a payday loan. All a would-be borrower would need is a bank account that is in fairly good standing, any form of valid identification, and a steady source of income.
Loan Terms

The State of Florida regulations only allow borrowers a maximum loan amount of $500 on their payday loans. This cap or ceiling is the same across all income levels, unlike in some states where the maximum payday loan amount depends on a certain percentage a borrower’s gross monthly income.

The loan term is between 7 – 31 days. The maximum finance rate that can be imposed on payday loans is 10% of the check’s face value and a verification fee will also be charged. This fee is not to exceed $5.  Finance charges applied to 14-day $10 loans is $16.11 while the APR or Annual Percentage Rate for the same type of loan is at 419%

Debt Limits
Borrowers are only permitted to have one outstanding loan at any given time. Payday loans in the state also cannot rollover. This means borrowers cannot just pay the interest and have the principal rollover to the next period. There is a 24 hour cooling off period in between loans, meaning you can get another loan only after 24 hours of paying of a previous loan.

Criminal action against borrowers who fail to make payments is prohibited. Borrowers are not charged any collection fees; all fees are charged to the lender by any financial institution. Nonpayment of loans, however, does have an adverse effect on a person’s credit standing.

How to Get Information or File Complaints
To know more about payday loans, pay a visit to or call the regulator, which is the Division of Securities and Finance of the Florida Office of Financial Regulation. They are located at 200 E. Gaines Street Tallahassee FL 32399 and can be contacted via landline (850) 410-9805 and fax (850) 410-9748.

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