Payday Loan State Laws

The issue of payday loan is a very interesting one as well as controversial. Payday lenders operate throughout the state; however, their work and rights differ with regards to the state policy. In accordance with the strictness of the law, there are states that can be called permissive, hybrid and restrictive.

Permissive states

Permissive states are very lenient in their payday loan regulation. They have fair amount of laws and provisions with regards to such lending options but they mostly allow lenders to operate in the way the latter seem appropriate. This refers to the amounts of loan granted as well as to the rates of interest charged. They allow charge more than $391 in APR for a single loan. There are 27 such states (e.g. Nevada and California).

Hybrid states

Hybrid states have more restrictive policy with regards to payday lenders. Their laws are more precise with the reference to the loan rate and term - the rates are capped to a certain fixed extent and the repayment periods are required to be of certain duration. There are 7 such states (e.g. Florida, Oregon and Washington).

Restrictive states

Restrictive states do not allow the operation of payday lenders on their territories entirely. There are 15 of them and Montana and Arizona as well as other 13 among them.

General statistic of the entire country shows that nationally about 5.5% of users resort to payday loan options as a solution to their financial complication. The state by state picture is a bit different - there in the state the range is much broader - 1-13%; with 6.6% in the states with permissive legislature, 6.3% in hybrid ones, and 2.9% in restrictive states accordingly.

It is quite clear that payday loans are really popular whether or not their propriety is discussed in the media.

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