What Happens If I Default on My Ohio Payday Loans?

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Payday loans in Ohio

 

Cash advance; paycheck advance or payday loans provide people with unsecured, small dollar loan alternative to traditional financial institutions. These types of loan are highly popular despite the fact that payday loans carry higher interest cost that regular banks. If you default on your Ohio payday loans and wondering what can happen to you, then better read on.

Payday loans in Ohio are regulated by the Department of Commerce, so the interest and fees charge by payday lenders are determined by the state. Payday borrowers in Ohio can defer their payment for up to 6 months, but the period if the loan still not settled then lender have an option to pursue collection in a legal way. In other words, if you default on your payday loans your lender can file legal action against you.

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Payday Loans Restrictions

Under the state of Ohio, only licensed payday lender or those that have undergone rigorous screening and have paid the application fee of $500 can collect legally against borrowers that defaulted on their loans. In fact, according to payday loan laws, per section 1321.02 online lenders or any storefront business that have no licensed cannot file any legal actions as the transaction is null or void.

Payday Loans Default Fees

Per 1321.16, payday lender can only charge five percent or five dollars and that if borrowers intend to pay the loan within 31 days, from the due date then a repayment plan is automatically offered according to the payday loans law of Ohio.

Payday Loans Collection

Payday lenders can collect the loan without legal assistance, or they can sell the debt. However, under section 1321.45 collections acting in behalf of the payday lender should properly identify themselves to the borrower, his family, employer, or friends. Phone harassment and calling after 9pm is also against the Ohio payday loan laws.

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