Did you know that not all states approve payday loans? Fortunately, Louisiana is one of those where payday loans are allowed. While these states authorize such type of loan, they vary on many aspects such as the maximum loan amount, term and annual percentage rate. It is best to know the laws of payday loans in Louisiana before you sign up for anything.
Maximum Loan Amount
The states have different maximum loan amounts. In Louisiana, you can borrow up to $350. It must be paid within 60 days. For the rates and fees, lending companies can only charge 16.75 percent of the check’s face-value and must not exceed $45. Borrowers will also be charged $10 for documentation fee. When you have been default, interest rate can be reduced from 36 to 18 percent starting on the 13th month.
Note that the lenders are not allowed to charge over 36 percent annual interest. They are also not authorized by the federal government to take check or secure loans through car title since 2007.
In addition, you can find payday loan stores that offer $100 loan to be paid within only 14 days with a finance charge of $30.
Payday Loan Limits
What’s great about payday loans in Louisiana is that there is no law indicating the maximum number of outstanding loans. However, you cannot renew or rollover. The laws in Louisiana also permit licensees to accept partial payment that is equivalent to 25 percent of the principal aside from the fees to get a new loan.
Laws on Collections
Louisiana also has laws specifying the collection limits and fees. Plus, there is a law prohibiting banks and lenders from taking criminal actions against borrowers who are on default. A borrower will also have to pay court costs and attorney’s fee if applicable. However, there are limits on collection fees. For instance, collection fees should include only one NSF fee and $25 or 5% of check face value.
Regulation on Payday Loans
There are ways to avoid the need to apply for payday loans but when the time comes that you need one, be very cautious. There are several tactics used by lending companies to evade loan and usury laws. For instance, they will allow you to pay in an installment basis but with very high interests. Some would also combine a payday loan with lines of credit so they can increase the rates.
What’s great is that there are laws so borrowers can expect that payday lending and stores are regulated by the Louisiana Office of Financial Institutions. Complaints on lenders may also be sent to their P.O. Box in Baton Rouge. One can also search for authorized banks at the institution’s official website.
Payday loans in Louisiana are a great financial solution for people who don’t have emergency funds pr have gone beyond their budget. If you live in Louisiana, you can look for authorized lenders offering payday loans that are in compliance with the regulations of the Louisiana Office of Financial Institutions and laws set by the state and federal government.