Mississippi Payday Loans & Resource Guide
Any time you borrow money using any type of loan or financial product, you should ask about the APR. APR stands for annual percentage rate, but it is not just used in situations where you take a year to pay back a loan. Instead, APR is a standard measure used to let you know how much it costs to borrow money as if you were going to have the loan all year. By having a standard measure of the costs of borrowing, it makes it easy to compare different loan products.
Once you understand APR, it is easy to understand why most financial experts and regulators are up in arms over a high APR loan called fast cash loans. Most people are very against these loans because they are very expensive. A payday loan can have a high APR that exceeds 450 percent. This is much higher than the APR on other kinds of financial products, including high interest credit cards that usually have an APR of around 40 percent or less.
When you just look at the APR associated with a payday loan, you may wonder why anyone would ever take such a loan. The reality, however, is that these loans have other unique features that can make paying the APR worthwhile.
The unique benefits of payday loans that can justify the high APR include easy qualification requirements, convenience and speed. You can get a payday loan really quickly with almost no application process. You just need to have a bank account and a job; even your credit score does not matter. This means that a payday loan can work well in situations where you would not be eligible for other types of quick loans such as a credit card or a bank loan.
You can also get a payday loan for a short period of time and for a small amount of money, which will give you the flexibility you need that is not available from other types of financial products. You can borrow the money to fulfill your immediate financial obligations and then you can pay back the loan with your next paycheck.
Mississippi Laws on Payday Loans
Due to concerns about the high costs of payday loans and the potential impact those loans could have on consumers, states have begun to regulate payday loans. Some states ban these types of loans entirely while others, like Mississippi, simply impose certain limits so that borrowers are protected from getting in to deep.
Mississippi addresses the issue of payday loans in Miss. Code. Ann. Section 75 - 67 - 501. Under the law fast cash Mississippi lenders have restrictions on the loan amount; the loan tenure; and the fees and finance charges.
The loan amount is restricted to $500, which means you cannot borrow more than $500 from a payday lender. However, the law does not specify a maximum number of different payday loans that you can take at one time. This means you could potentially have more than one $500 loan out at a time.
The Mississippi fast cash laws also require that the loan be a maximum of 30 days if you borrowed $250 or less. If you borrowed between $250 and $500, the maximum loan tenure is between 28 days and 30 days.
Finally, the laws impose restrictions on the interest, fees and costs. If you borrowed $250 or less, the maximum that the lender can charge you is $20 for each $100 borrowed. If you borrowed between $250 and $500, the maximum that you can be charged is $21.95 per $100 that you borrowed. When you add up these fees and costs, you end up paying an APR of 520 percent if you borrow $100 for a period of 14 days.
Stay Educated About Mississippi Payday Loan Laws
Knowing the law is very important if you borrow money from a payday loan lender. In Mississippi, the law provides you with some protections from the worst abuses of payday loans, but you can still get in over your head if you aren't careful and if you do not make informed choices.