Is Your Payday Loan Vendor Legal?
Payday Loan Place Window Graphics (Photo credit: taberandrew)
A Payday loan is a short term loan that consumers can take out for emergencies and repay with their next paycheck. Some states have strict regulations to protect the consumers, while others have none. Most states require licensing. For this information on individual Payday loaners you can contact the Department of Corporations within your state. They will provide you with information on the loaner.
Nationwide Mortgage Licensing System and Registry (NMLS)
The (NLMS) provides the Consumers a full searchable Website to view certain information concerning state-licensed companies, branches, and individuals. It is now mandatory that all mortgage loan originators are required to have a background and criminal check. The (NMLS) coordinate specific state requirements for licenses and renewals.
Internet Payday Loans
Payday loaners have moved from storefront to the Internet; most are not licensed with the Department of Corporations, evading state laws, and regulations. State and Federal Truth-in-Lending statutes require lenders to disclose the true cost of credit in the form of an Annual Percentage Rate (APR) prior to the actual loan. Internet Payday Lenders usually advertise fees as in dollar amount rather that (APR). This is misleading in determining the actual cost of the Payday loan. When using Internet Payday Loaners they must have the consumers’ personal information, and permission to debit and transfer amounts from bank accounts. This is an opening for identity theft. Department of Corporations strongly urges potential Internet Payday loan customers to be careful. Most Internet Payday loan vendors are very difficult to contact and are outside of the United States.
What to Watch For
Be aware if there is a third party dispensing loans on your behalf. Ask to visually see their active license to dispense Payday loans. It is a requirement that each lender has a license for each operating center. A display of the notice of your loan fees, interest rate and any other fees involved should be in a visible area on the documents. If an online loan is offered the notice should be available on the website to be viewed by the customer. A cap is offered on the number of times that customers can roll over a loan, as well as the number of loans a borrower can take. If something does not feel right about the loan, research your Payday loaner and contact the Department of Corporation. Make sure the lending agreement outlines the information clearly. The agreement should state the full loan amount, loan fees and maturity date. A small loan rate cap is part of the usury laws. Lenders cannot charge a three digit annual percentage rate.
These types of loans are typically of scams and identity thefts because the borrower is now vulnerable. Seek other avenues such as an advance from your employer, or seek financial help from larger more stable financial institutions. To properly consolidate finances, debt free counseling is very helpful and most are free. The Government has also offered many different programs to help individuals become debt free.
Author Bio
Rachel is a finance graduate and pursuing her masters in accountancy from a leading university in Bristol. She reviews pay day loan companies like Full Pocket for their service and writes resourceful blogs helping others to understand the in and out of attaining a Pay Day Loan from lenders like Full Pocket
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Category: Loans
