Payday loan also known as cash advance, salary loan is a short-term unsecured loan offered to customers receiving regular paycheck. If you reside in South Carolina, you can obtain a payday loan locally or through the Internet, when you do not want the hassle of applying for a loan personally. This article talks about the Internet payday loan laws, so borrowers are guided when they apply for loan.
Deferred presentment transaction is another name for payday loan, since it allows the borrower to issue postdated check for a short term loan on any of the lending institution whether online or offline. If you are a South Carolina resident then it is important that you are aware of the laws that govern this type of loan, so you won’t be fooled into any transaction that is against the state law, especially when applying for a payday loan online.
In South Carolina, all prospective lenders must obtain a license from the state. The lender must pay $1000 application fee, $500 investigation fee for their application with the state board of financial institution. The net worth of the lenders should also be at least $25,000 as this is the minimum amount required.
According to payday loan laws of South Carolina, Internet payday lenders cannot lend over $550 in any transaction, since the enactment of the law in 2011. Furthermore, payday lender is discouraged from allowing borrower to keep the loan outstanding beyond 31 days. The state also does not allow rollover of the loan, wherein customers with outstanding loan borrow again to pay the first loan. The South Carolina law requires full payment of the original loan before another one issued again to the same borrower.
The law also state that a cooling period of 1 business day is practice by lenders throughout the year, per Section 34-39-175 SCC. The payday lenders of South Carolina uses a database to search whether the borrower has an outstanding loan, before granting a loan to anyone as violation of the laws can ruin a business. By the way, the annual percentage rate or APR in the state is 459 percent, still cheaper compared to other states.Share