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Maryland Payday Lending Laws & Regs.

No one likes to borrow money, but sometimes it is inevitable that you will need to do so. Borrowing money becomes a necessary financial choice if you have an expense that you absolutely cannot wait to pay. For example, if you need cash now to put food on the table, to make an emergency repair or to see a doctor, you cannot afford to wait until your next payday in order to do these essential tasks.

When you find yourself in this situation, you will need to explore options for getting cash quickly. Some people will turn to a credit card if they already have a card in their name. A credit card can be used to charge things or, in the event that you need fast cash, you might be able to get a cash advance.

Not everyone has a credit card though, and sometimes a credit card will not provide you with the immediate cash advance you need. When you are in this situation, then you may need to turn to a financial product called a payday loan. Payday loans are intended to provide a very short - term loan. You provide your bank account information and sometimes write a post - dated check. On the basis of this information, a lender approves for a quick loan and gets you the money you need right away.

Payday loans are an option for people with bad credit, in addition to offering a needed financial product to those who are in a tight spot and who need money. However, payday loans should not be used as a means of borrowing money except as a last resort when you really need them. You don't want to take a payday loan unless your expense is truly something that cannot wait until payday.

You want to save payday loans for only the most pressing of expenses because it costs a lot of money to borrow. You pay a fee which, when expressed in terms of an annual percentage rate (APR) amounts to paying as much as 450 percent a year to borrow the money. You won't keep the loan for a year of course, but you could pay 15 percent or more in fees just to borrow money for a week or two. This is compared with 30 percent or lower for most credit cards, which means you pay half as much in costs to borrow for a week or two, as you would pay for a whole year.

This high cost means that you should never use payday loans unless you really need the money. In these situations, however, these loans can be the best answer.

Payday Loan Laws in Maryland

Because of the downsides of payday loans, many states have imposed laws designed to protect consumers. Some states simply limit what payday lenders are able to do but others have imposed a complete ban on payday loans.

Maryland is one of those states that bans or prohibits all payday loans. The law addressing this issue is found in Md. Code. Com. Law section 12 - 101.

Under the Maryland fast cash laws, there are caps placed on the interest charged on small loans. Small loans can charge a maximum of 33 percent interest per year or 2.75 percent per month. These low interest rates make payday loans an unprofitable business, which means you are not going to find conventional payday loan lenders willing to offer you a loan in Maryland within the bounds of the law.

Staying Educated About Maryland Payday Loan Laws

To protect your financial situation and secure your financial future, it is important to stay informed and educated about the laws in your state. Knowing Maryland's payday loan laws and understanding the ban that is in place helps you to be informed so you can make wise choices about how you want to borrow money to meet your financial needs.