Laws to Know Regarding Payday Loans in Missouri
The payday loan market in Missouri is relatively steady. The Missouri Division of Finance releases a report on payday loan statistics each year. The 2015 report stated about 1.87 million payday loans were taken out in 2014 (down about 3% from 2013), and the average amount was a little over $300 with fees and interest of about $50. Considering there were almost 2 million payday loans in Missouri in 2014, the number of complaints (32) is impressive.
Are you considering applying for a payday loan in Missouri? It helps to know and understand the laws regarding these short-term loan options. Start with the definition of a Missouri payday loan. These loans are valued at no more than $500 and must be paid back within a specified time frame.
Seek Proof of Licensure
The Missouri Division of Finance licenses all payday loan companies. Per Section 408.500.1, to gain a license, the computer must pay a yearly licensing fee of $500 (rate valid as of April 2016). The company must also comply with a number of measures designed to protect the consumer, including limiting the APR and requiring your signature on any Missouri payday loan or loan extension or renewal.
In order to ensure you are dealing with a licensed payday lender, look for clear display of the license. If you go into a physical office, each location must have its own license.
Interest Rates, Repayment Terms, and Fee Limits
When you take out payday loans in Missouri, you can repay the loan before the close of the next business day and not have to pay any fees or any interest charges. Otherwise, the state does have a cap that limits the interest rate and fees you can be charged on your first payday loan or subsequent renewals to 75%. The repayment terms must be made clear and cannot be less than 14 days or more than 31 days.
If your 14- to 31-day time frame is up, you can renew your payday loan. However, it is important to understand that you are only allowed to renew a loan six times. After that, you must repay the amount in full before you can have another payday loan in Missouri.