Payday loan is a type of loan taken against the imminent paycheck of the borrower. Payday loans often covered by post dated check to lender, where the loan amount including the interest and fees added to the total amount and lender cashes the check on the due date indicated. Payday loans in some states considered illegal but the Louisiana states legalized it, so lenders have to comply with the limitations prescribed by the laws.
The state of Louisiana imposed a maximum loan limit amounting to $350 per borrower at a time only. The payday lenders allowed to charges an interest rate of 16.75% or roughly $45, whichever the lesser amount. If debtor fail to pay the loan or defaulted, wherein the checks issued returned for insufficiency of funds and the payday lender not paid then they can charge additional interest by as much as 36% on the remaining balance for the first year, and 18% for the remaining balance still not paid in the subsequent years.
Payday Loan Rollovers
The payday lenders of Louisiana cannot roll over the loan from one period to another pay period, so the debtor must pay the full loan and they can take out a loan again if badly needed. But of course, the borrower can pay 25% of the payday loan including the applicable fees when the loan taken out, so rather than paying the entire loan they can just enter a new due date for the said loan.
For example, the original loan and fees totals $122.50, the borrower only need to pay $30.63 and then they just take out a new loan with the same original due date.
No Notice of Loan Terms Necessary
In Louisiana, the payday lenders are not required to post terms of loans or notice. So, when one wants to know the loan details they can either ask for it or look around the place in case there is a notice posted.Share