Louisiana Payday Loan Guide
Making ends meet can be very hard, especially when you have a surprise expense or a bill you did not budget for. There comes a time in almost everyone's life when you run out of money before you run out of month and when this happens to you, you need to find a way to deal with the problem.
For some people, there are very limited options for how to address this issue. If you have bad credit or if you do not have a credit history, for example, you may not be able to be approved for a credit card that you could charge things on or that you could use in order to get a cash advance in an emergency situation. A bank loan is also not an option in many cases, either because of bad credit or because you need a quick loan and bank loans tend to be longer term and have a longer and more involved application process.
While you may have limited options, however, things are not hopeless. One type of loan that may be available to you is a payday loan which is a type of fast cash loan. Payday loans are specifically intended to allow you to cover surprise costs and to give you the money you need to pay immediate expenses if you fall short before payday. The idea is that you will borrow the money, pay a fee to the payday lender, pay your bills and costs and then repay the money when you get your next paycheck.
Unfortunately, the fee when you take on a payday loan is generally very high. This is the major downside to payday loans. When the fee is expressed in terms of the annual percentage rate - a standard measure used to assess the costs of borrowing - then you can easily see just how expensive this fee is and how much the loan costs you. While a credit card would have an annual percentage rate (APR) or around 30 percent or lower, the effective APR of a payday loan is around 450 percent.
Before you pay this high cost of borrowing, you need to be sure that the expense you are borrowing for is a truly worthwhile one. If it is, then a payday loan can provide you with an important source of money that you need to get you through until you get paid.
Louisiana Laws on Payday Loans
In Louisiana, lawmakers address the controversial subject of payday loans in La. Rev. Stat. Ann. Sections 9:3578.1. Within the relevant code sections in the state law, Louisiana imposed some limitations on what lenders can do in order to make sure that consumers are not completely taken advantage of if they need to take a payday loan.
Under the Louisiana fast cash loan laws, a debtor who is interested in taking on a payday loan is not permitted to borrow more than $350. There is, however, no stated rule about how many loans that a debtor is able to take out at once. When money is borrowed, the law also sets the loan tenure at 60 days.
In addition to addressing the length of the loan as well as the maximum amount borrowed, Louisiana also addresses exactly how much money a payday loan issuer is able to make off of a loan. The state does this by capping the fees and finance charges. The rules say that there is a maximum 16.75 percent finance charge and that there is a $45 maximum fee. Further, there is also a $10 documentation fee permitted.
Unfortunately, fast cash Louisiana rules mean that lenders can still charge a whole lot. The APR on a 14 - day loan for $100 is 780 percent under Louisiana's rules. This is much, much higher than the 450 percent or lower that you find in most states. It means payday loans are very expensive in Louisiana.
Staying Educated About Payday Loans in Louisiana
The laws that outline the rules for payday lenders directly impact how much a borrower has to pay and how much debt trouble a borrower can get into. With such a high APR in Louisiana, these laws provide only the barest of protections for a debtor. It is thus very important to ensure that you know what you are getting into when you take out a Louisiana payday loan.