Borrowing Money in New Mexico
Almost everyone at some point in his or her life has faced an unexpected financial expense that it is hard to deal with. For those who are living paycheck to paycheck with little or no money accessible in the bank, these types of unexpected financial expenses can be scary.
In situations where you need to borrow cash fast, your best or even only option may be a loan called a payday loan. Payday loans or fast cash loans lend you a small amount of money to meet a pressing financial need. The loan is a short - term and unsecured loan, which means that there is no collateral, which means that the loan has to be paid back in a very limited period of time.
Payday loans can be obtained quickly to deal with your pressing economic crisis. They can also be obtained even if you do not have a good credit history as a result of bad debts or bankruptcy. You will typically be able to qualify for a payday loan in any situation as long as you have a bank account available to you and as long as you can show that you have a steady job that you are working.
When you qualify for a payday loan, you should aim to pay it back with your next paycheck so you do not fall into a debt trap that it becomes difficult to escape from. You should also be aware that you are going to pay a high fee for the convenience and the ease of getting a payday loan. The fee and cost to borrow money is expressed in terms of APR, which stands for annual percentage rate. Costs are always expressed this way, even for short term loans like payday loans.
The APR on a payday loan can be as high as 450 percent or more. This is because you pay a lot for a small loan that you don't have for very long. To truly understand how expensive this is, consider that the average mortgage has an APR of 6 percent or less and the average credit card an APR of 30 percent or less. The costs, therefore, are very, very high. However, a payday loan can still make sense if you really have a pressing financial need that cannot wait until your paycheck comes.
New Mexico Payday Loan Laws
In the state of New Mexico, there is a law on the books specifically related to payday loans. The law is found in N.M. Stat. Ann. Sections 55 - 15 - 32 to 38. These laws address many important issues when it comes to borrowing money from a New Mexico fast cash lender
For example, there is a maximum loan amount set in New Mexico for payday loans. You are not permitted to borrow more than $2,500 in a payday loan. This is a much higher limit than in many other states where you can take loans only up to $500. You are also allowed to have your payday loan for a term of between 14 and 35 days in New Mexico. There are no rollovers permitted but there are also minimal limitations on how many payday loans you can take at one time provided that the loans do not exceed 25 percent of your gross monthly income.
New Mexico also imposes a maximum cap on both fees and finance charges, which means that there are limits to how much you need to pay for a payday loan. The cap is set at $15.50 for each $100 and a .50 verification fee for each $100. If you take a 14 - day payday loan for $100, this works out to a loan with an APR of 416 percent.
Stay Educated About Payday Loans
It pays to be informed about any financial transaction you enter into, especially if you are borrowing money. Knowing the fast cash New Mexico loan laws helps you to understand what you are getting into and what protections exist to ensure you do not get in over your head. With this information in mind, you can decide if a payday loan is right for you.