Online Cash Loans Are Safe Because You’re Protected By State Law | PaydayLoanSolutions.Net

Online cash loans are one of the most controversial forms of lending in the United States. We say controversial because the financial sector continues to kick up a major fuss about it. The repayment length of these loans is almost always less than 30 days with 7-14 days the norm. As a result, the APR on these loans is considered to be high and average around 450%. Despite the service that these loans provide, some areas of the finance sector want to see them banned. At present, there are 13 states which don’t allow online cash loans. In many cases, this is simply because state law forbids lending money above a certain level of APR. Those who are interested in opening an online cash loan company in these states can consider themselves unfortunate.

Maximum Loan Amounts

Within the 37 states where online cash loans are legal, there are a series of rules and regulations in place to protect the consumer. If you seeking cash loans online, be sure to read your own state’s law and ensure that your lender is adhering to the rules and regulations outlined by your state. Perhaps the most pertinent legal aspect relates to the amount of money that can be borrowed. Of the states where online cash loans are legal, California has the smallest allowance at just $300 while Idaho companies can loan up to $1,000. States like New Mexico have their own rules in place which don’t allow any company to lend more than 25% of the borrower’s monthly income during the course of a month.

Loan Term

When it comes to the length of loan term, few states go beyond the 31 day mark. Exceptions to this include Oregon which allows a loan period of up to 60 days and Nebraska which allows 34 days. When it comes to minimum loan term, seven days seems to be the smallest though Oregon again bucks the trend by setting the minimum repayment period at 31 days.

Interest

The most important thing when it comes to online cash loans is of course the amount of interest that must be paid on it. Few states have a straightforward ruling so you would be advised to check out your state’s laws and decide whether or not you can afford the interest. Opponents of online cash loans don’t like to admit that state regulations protect consumers against the ‘exploitation’ which is claimed by certain elements of the financial sector. For example, online cash loan companies in Montana are not allowed charge more than 36% per annum. In Hawaii, the lender can’t charge more than 15% of the face value of the check. So for a $200 loan, $30 is the maximum interest to be paid and the loan term can last as long as 32 days. This equals a low APR.

The fact is, state law ensures that ‘predatory lending’ simply doesn’t exist. Reputable online cash loan companies adhere to these rules and provide an excellent service for clients in need of fast cash. Cash loans online are here to stay and will continue to help people in real financial need.