If you are wondering about payday loan, know that this is a type of loan that is temporary in nature, unsecured, high interest bearing and short term loan. The payday loan often guarantee by borrowers with postdated, personal check covering the principal loan and all fees or an authorization for the lender allowing the loan amount and interest to be deducted automatically according to the schedule of repayment.
In the state of Washington, the payday loan laws, effective January 1, 2010 put a cap on payday loan, wherein the loan limit is $700 or just 30% of the total gross monthly income of the borrower, whichever is less. Additionally, borrower’s information according to the state of Washington must be registered to the statewide database, just to make certain that lenders have the most recent information and no outstanding loan.
In Washington, borrowers is only allowed up to 8 loans per annum or in a year, which means once you have exhausted the maximum payday loans then you have to wait until after the 12 month period. If the loan not paid on the due date, borrowers can request for installment plan without further fees involved.
The state also prohibits lenders from granting another loan, to anyone with outstanding loan. So as to prevent borrowers from defaulting as payday loan is also a temptation, because of the easy process and hassle free service. By the way, the minimum term for payday loan is 45 days, when applying for a loan in Washington.
The APR or annual percentage rate for payday loan is 390%, so that means the finance charge per $100 is just $15 for a period of 14 days. The interest rate should also not cross 15% for $0-$500 and then 10% for the balances. Take note, when you default on payment, loan renewal or rollover is not allowed in the state. Additionally, a nonsufficient funds or NSF fee amounting to $25 is charge to borrowers when checks issue returned, collection cost that includes attorney fees, damages and interest fees are added to the loan, when the payday loan is not settled.Share