A hot product in the credit market, the payday loan is becoming a popular way to get some quick funds for an immediate need. However, it is easy for the customer receiving the loan to be taken advantage of by high interest rates and quick turnaround times. With this danger present, some states have taken action to either restrict or outlaw these kinds of loans in order to protect their citizens. To know how you are affected, here are the regulations for each state.

What is a Payday Loan?

A payday loan is a short term deal used for small emergency purposes, such as an unexpected car crash or a bill that is overdue. They are usually small loans under $1000 that must be paid back in full within the next payday of the borrower. With this tight timeframe, the interest rates are astronomically high, possibly exceeding 350% if you pay late. Due to the short schedule and huge rates, these loans can be very dangerous.

Free States

32 states do not have much if any legislation prohibiting payday loans. If you live in these states, it is important to know the rules they do have and then examine the rates and charges the lender requires before taking out any loan.

Alabama, Alaska, California, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, Wyoming

Stricter States

These 5 states have much more legislation and restrictions on payday loans, helping out consumers by limiting the rates payday loan companies can charge. A payday loan in these states is generally not as harmful as other states:

Maine, Montana, New Hampshire, Ohio, Oregon

Locked States

12 states have taken to outlaw payday loans with the idea of protecting customers. Generally, these states have a minimum time that a loaning company must offer for the loan to be paid back to limit short term rate maximums.

Arizona, Arkansas, Connecticut, Georgia, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Vermont, West Virginia.

Protect Your Finances

With payday loans, it is imperative that you know the details of the loan before entering into a deal that might haunt your bank account. Here at Progressive Debt Relief, we can help you climb out of unrestricted loan debt so that you never fall for the trap again. Contact us today at 1.877.590.1847 to set up a free consultation or to get more information.