Times have been hard in the recent years and it seems that the income of most working individuals is not enough to meet their daily needs or expenses. If you’re a Florida resident, you must be aware that it is not against the law to apply for loans especially when you’re experiencing a financial difficulty. However, payday loans are not authorized. If you are in need of money, the best option is to apply for a cash advance. Still, there are always exemptions to the rule.
The payday loans are not authorized but you can still find payday lenders in the state. The industry badly needs payday lending but there are regulations to follow. It is vital that the restrictions are followed or else the lending institution can be banned or closed. The reason why payday loans are not authorized is because some lenders are taking advantage of the situation. Some practices have been noted and it was proven that instead of helping the borrower, the latter is not able to solve his or her financial problems. At times, it can even make matters worse.
The payday lenders should follow the regulations set by the state. Here are some of the regulations that are strictly enforced.
1. The lenders can’t seize a borrower’s wage when the loan is unpaid.
2. Even when borrowers are unable to pay, they will not be sued for criminal action.
3. The annual percentage rate is limited to 18%. This is applicable to credit lines, debt collections, and cash advances. Aside from the APR, the limitation also covers exchanges, commissions, discounts, advances, and indirect rates. This rule doesn’t apply to loans made prior to 1979 and to mortgage loans with the Federal Housing Administration and Veterans Administration.
The state wants to protect both the lender and the consumers. If there are regulations that should be followed under payday loans, there are also some regulations that you must know if you want to apply for a cash advance. Here are the regulations that govern the cash advances.
1. A cash advance can be repaid in seven days to thirty-one days. When the term is shorter, the borrower can avoid piling up the interests, thereby increasing the chance of paying the loan with ease.
2. Unlike other states, Florida has set a limit in obtaining a cash advance. You must be aware that you can only apply for a loan with a maximum amount of 0. With a smaller amount to repay, it will not be hard on the pocket.
3. Aside from the limit on the amount, there is also a maximum interest. The loans can’t charge more than 10% plus the verification fee. In comparison to other states, it is definitely the lowest.
4. The loans can carry an APR of 390% for a two-week 0 cash advance. The processing fees charged by the lenders should not go over 5% of the loan amount, including the 10% interest. In other states, loan rollover is allowed but in Florida, you have to repay the existing loan and refinancing is not allowed.
5. Florida protects the lenders and consumers by having the Enforced Repayment Plan. There are instances when the borrower can’t repay the loan on time because of personal reasons or difficulties. The government mandates that the lender has to setup a repayment plan that will help the borrower in getting out of debt. The grace period that is given at the maximum is another sixty days from the actual due date. At this point, the borrower is required to attend credit counseling. Only those who attend the counseling are qualified for the grace period.
Make sure that you find reputed lenders in the state before applying for a cash advance.