Maine Payday Lending Laws & Regulations
There is nothing more frustrating and frightening than having an expense you need to pay and having no money to pay it. Most people get paid biweekly, which means you might have to wait as long as two weeks to get a paycheck and to meet your financial obligation. In some cases, this is not acceptable, such as if you need to go to the doctor, do a home repair, put food on the table, keep the utilities on or repair a car you need in order to get around.
For those who have a must - pay expense and who have too much time left until payday comes, the best and only option in many cases is a fast cash payday loan. A payday loan will provide money quickly with a minimal application process and waiting period, unlike applying for other kinds of financing such as bank loans or credit cards, which may take a long time.
Payday loans can also be obtained with minimal qualifying requirements as well, which also makes them preferable to other kinds of financing. For example, even someone with bad credit or without any credit history can obtain a payday loan. It is as simple as providing information on your job and providing your bank account.
Because they are so easy to qualify for and because they allow you to get a quick loan, many people turn to payday loans when they are having a financial emergency. Unfortunately, you've probably heard from financial experts that payday loans are really bad and that you should never get a payday loan. It really depends on the situation you are in. If you need the cash for a bill until payday then this is a great loan type for you.
Most experts recommend against using payday loans because of the fact that these loans can be very expensive to take on. You pay a fee for borrowing the money, which is really high considering the loan is usually for a small amount and for a very short period of time. The fee can be expressed in terms of an annual percentage rate (APR) in order to compare it to other kinds of loans. When you do this, you'll see an APR of around 450 percent or more on a payday loan as compared with a fee on a credit card which almost never exceeds around 30 percent.
Payday Loan Laws in Maine
Despite the fact that payday loans can have some benefits, those who live in Maine and who wish to take out this type of quick loan are going to find it difficult or even impossible to do so. This is because Maine fast cash lenders have limited exceptions carved out for supervised lenders. The rules setting forth the restrictions on payday loans are found in Me. Rev. Stat. tit. 9 - A section 2 - 401.
According to the laws in Maine, there is a maximum interest rate set on small loans. If the loan is for $2,000 or less, then there is a maximum 30 percent interest rate. This rate is much lower than the effective 450 percent or higher APR on most payday loans. As such, payday lenders are generally not going to operate in Maine due to the low potential profit.
Staying Educated on Payday Loans in Maine
Knowing the fast cash Maine laws is very important, especially in states where a ban is in place. Since payday loans are not permitted in Maine, you should be very careful if you encounter any lenders who are offering payday loans or who are trying to charge you a fee or interest higher than the amount permitted by law.