Utah Government Moves to Ban Lenders From Refinancing Payday Loans
With an APR averaging a little over 450 percent. The Utah House returned a unanimous vote to ban payday loan companies in Utah from refinancing these high-interest loans. The Utah Senate now has their say, but experts feel it’s very likely to pass, especially after the scandal linking former Utah Attorney General Swallow to certain payday lenders.
Ending refinancing is just one of the measures being taken to protect borrowers without banning payday loans completely. Other actions include requiring lenders to extend interest-free payment plans to borrowers struggling to repay their payday loan. Many payday loan companies avoided this regulation by refinancing payday loans instead. Many payday loan company owners, including the heads of Check City and USA Cash, support the changes.
That practice will come to an end if the Senate passes the bill created by the House. Payday lenders will need to make sure repayment terms are clear to borrowers. At the same time, borrowers must understand that payday loans are not to be taken lightly. They must be repaid on the scheduled repayment date listed on the loan paperwork.
In addition, other regulations have hit the payday loan industry in Utah. This includes requiring payday loan companies to look into a borrower’s credit history, report any lawsuits filed for non-payment of a payday loan, and extend interest-free repayment terms for 60 to 90 days.
Before you agree to a payday loan in Utah, make sure you do not have any other option. Sell unused items. Talk to your employer to see if they can offer an advance on your paycheck or allow you to cash in unused vacation days. Talk to friends, family, and even your church about a one-time loan to get you through a tight spot. Payday loans can be helpful when you’re in a tight spot. But, repaying that loan is your responsibility. If you find yourself struggling to repay the loan, you must talk to the lender about setting up a repayment plan.
