Hawaii Ditches Payday Loan Cap Bill
There’s good news for cash-strapped residents of Hawaii, the state government recently ditched plans to substantially cap payday loans in Hawaii. While the bill had the best of intentions, the reality is that capping the rates could have put some companies out of business. This was not good news for those who need cash for emergencies and don’t have the time to wait for a traditional bank loan to be processed.
Senate Bill 737
The proposed bill would have drastically lowered the maximum interest rate on Hawaii payday loans to 36 percent and boosted enforcement of current payday loan laws that state loans must be paid back in 30 days. After a disagreement between the House and the Senate, the bill was pushed aside.
Hawaii Payday Loan Laws
In addition to requiring payday loans in Hawaii to be paid back in 30 days, lenders are already restricted with a maximum 15 percent loan fee for loans of up to $600. The example was given by the House that many Hawaiians who use these loan products pay approximately $88 in fees on top of a $500 loan.
Know What Your Obligations Are
The problem seems to occur when borrowers fail to understand how the loans work and do not pay back within the required 30 days. Some borrowers are taking out additional loans, something the Senate wants to end. They proposed a legal requirement that borrowers have to wait five days after paying off their first loan before they can legally take out a second. With the bill set aside, borrowers will not have to deal with any changes for now.
It is important for anyone borrowing money with a Hawaii payday loan to understand the laws and fees. Payday loans are meant to provide you with immediate cash until your next paycheck. Make sure you are in a position where you will pay the borrowed amount plus fees back within 30 days. If that is a financial strain, look for other options, such as borrowing from your church, friends, or family or selling unnecessary items in your home.