Payday Loans in Ohio
An Overview on Legal Status and Regulations
If you live in Ohio and need immediate funding, you will be delighted to know that payday loan lending is authorized in the state. Whether you live in Cincinnati, Akron, or Cleveland there is a payday loan lender that can offer you a fast and convenient way to get cash. According to the Ohio Revised Code Annotate 1321.35, borrows may seek for urgent cash from payday loan lending companies that are given full license by the state of Ohio.
The financial service companies that feature payday loans as of its many offerings can only approve out up to $5000 maximum loan amount. Even borrowers that are verified to have the capacity to pay for higher loans are prohibited to take out more than the amount that is set by the state.
The maximum allowable interest rate set by the state of Ohio is 28%. This is comparatively lower than those from neighboring states. Reputable payday lending facilities even charge 25%, thus making the payday loan lending environment highly favorable to borrowers. For a standard two-week $100 loan, the lender may only add $1.08 for the interest. Therefore, the maximum amount that can be added onto the face value of the check is $6 or lower.
Payday loan lending companies cannot collect from borrowers in less than the minimum loan term which is 14 days. On the other hand, the maximum allowable term for a payday loan regardless of amount is 31 days. Loan renewal practice or the ability to roll over the loan to yet another loan is strictly prohibited in Ohio. Furthermore, borrowers cannot make a loan application for 90 days after the full payment for the previous has been settled with the lender. The cooling off period ensures that borrowers will have enough time to save up, which in turn may reduce their dependence on quick sources of cash such as those offered by payday loans.
Only payday loan companies that are duly licensed by the state can offer payday loans. Necessary fees are required by the state to be paid off by the lender before they start operations. For instance, a fee of $200 should be paid off right away for background check. Licensing fee on the other hand is at $500. Businesses that are looking to open a payday loan business should feature at least $10,000 net worth. This will show their financial stability and their capacity to cater to numerous borrowers on a regular basis.
Physical payday loan establishments should clearly showcase their license so borrowers can identify that they are indeed seeking for loan approval from a payday loan lender that practices good lending habits. At the same time of approval, a lender should be able to present a written agreement with the borrower. State policies require payday loan lending companies to provide all pertinent information of an approved loan which include loan amount, loan duration, interest rates, and other applicable fees. Only then should borrowers can sign a contract agreement which will reflect their understanding and awareness of the terms and conditions of the payday loan.