1) What requirements must I meet to apply for the loan?
An applicant will have to satisfy the following standard requirements for a cash advance:
· Be at least 18 years of age
· Be a resident or a U.S. citizen
· Have a valid and active bank account
· Have a regular monthly source of income of at least $1,000
Some optional criteria required by some payday advance lenders include
· a copy of valid identification (passport, driver's license)
· a 30-day bank statement
· a bank account that was opened more than 90 days ago
2) Is the payday loan application free of charge?
Yes. Applicants should be wary of cash advance lenders that charge application fees.
3) What is the maximum that I can borrow?
State law authorizes cash advance loans in the range of $100-$500.
4) Will my personal data be protected?
A payday loan company will ensure the protection of the borrower's privacy as well as the confidentiality of his/her application and personal information. Sensitive online data will typically be secured by way of SSL encryption technology, considered the highest standard in the industry. A quick payday loan business will not disclose a consumer's information other than what is necessary for loan approval purposes.
5) Do I qualify for a cash advance if I have bad credit or no credit at all?
Applicants are not required to have a credit history or good credit. A check cash advance store will not perform a credit check or discriminate against borrowers on the basis of their credit rating.
6) Can I apply online for a payday loan?
Yes, borrowers have the option of filling out online payday loan applications.
7) When will I be notified of the approval status of my payday loan?
An applicant usually obtains cash advance approval within a few hours of submitting his/her application.
8) When will I receive the cash advance loan funds?
The payday loan funds are wired or transferred to the borrower's account overnight or within 24 hours of approval.
9) Will the payday advance funds be deposited into my checking account?
Typically, the short term loan funds will be directly deposited into an applicant's checking account.
10) Can I ask that the funds be transferred to my savings account?
Yes, payday loan funds can be wired either to the borrower's savings or checking account. A savings account only payday loan provides for an electronic deposit into the customer's savings account.
11) What repayment options are available from payday lenders?
Borrowers can choose from among the following payment options:
1. Payment of the loan in full on the due date;
2. Payment of a finance charge and a portion of the principal on or before the due date; or
3. Payment of only the finance charge on the due date.
12) How much will I pay in finance fees on my cash advance?
Payday loan finance fees are determined by state and federal laws and depend on the amount borrowed. They are usually a fee per $100 issued or a percentage of a check cash advance's face value.
13) What happens if I fail to pay the cash advance loan on the due date?
Borrowers who fail to pay the loan on the due date can pay a fee to rollover or extend their loan until the next payday. The payday loan company can collect on a delinquent loan by utilizing all available legal remedies such as a civil action and lawful debt collection.
14) Can I renew the loan, and if so, how many times?
Renewal and the number of rollovers permitted is a state-by-state determination. The law varies from state to state. To be approved for a cash advance loan, a borrower must fulfill the following requirements:
- Be currently employed (for at least one month) and have a regular source of income from either government benefits (i.e., disability payments or Social Security) or employment;
- Be earning at least $1,000/month;
- Have a valid savings or checking account that has been active for at least 90 days;
- Be at least 18 years old and submit proof of personal identification; and
- Be a permanent resident or U.S. citizen.
Some short term loan companies also require that the applicant not have more than two outstanding loans with other lenders
15) As a California customer, what percentage of the loan amount can a lender's fee not exceed?
In California, 15% is the maximum percentage of the loan amount allowed in lender fees.
16) As a California borrower, what is the maximum value of a payday loan check?
$300 is the maximum amount that borrowers can obtain from payday lenders in California.
17) As a Florida customer, how much times must I wait after paying off one loan before requesting another loan?
Florida customers must 24 hours after paying off one payday loan before borrowing a second loan.
18) As a Florida customer, may I roll over a loan for another period?
No, Florida customers are not allowed to roll over payday loans into another period.
19) As a Minnesota customer, what is the maximum amount that I am allowed to borrow?
$350 is the maximum loan amount that customers in Minnesota are allowed to borrow.
20) As a Minnesota customer, must I provide an online payday loan lender electronic access to my bank account?
Yes, customers in Minnesota have to provide an internet lender electronic access to my bank account.
21) What Consumer protection laws exist to regulate the cash advance loan industry?
There are a number of consumer protection laws regulating the payday loan industry, and they include the following:
- · Regulation Z of the Truth in Lending Act requires full disclosure of the cost and terms associated with credit transactions, such as finance fees and the annual percentage rate (APR).
- Regulation E (also referred to as the "Electronic Funds Transfer Act") sets out the rights, duties and liabilities of lenders and borrowers with respect to electronic funds transfers (EFT) and protects borrowers utilizing the EFT system.
- The Equal Credit Opportunity Act (ECOA) bars lenders from discriminating against borrowers of credit on the basis of their color, race, national origin, religion, marital status, sex, and age because the borrower exercised in good faith his rights under the Consumer Credit Protection Act. The ECOA also requires financial institutions to furnish applicants with the reason for denial of credit.
- The Fair Debt Collection Practices Act (FDCPA) bars third-party debt collectors from engaging in abusive or deceptive practices to collect consumer debt incurred for family or personal purposes.
22) What steps do payday loan cash advance lenders and stores typically take to ensure the privacy, security, and confidentiality of loan transactions and borrowers’ personal information? Cash advance stores take the following steps to ensure privacy, security, and confidentiality vis-à-vis loan transactions and customers' personal information:
- They implement strict safeguards and controls to protect the payday loan borrower's account and personal data.
- They employ SSL technology (the industry standard) for protecting the integrity of websites.
- They do not resell the borrower's information,
Finally, there are laws protecting customers from the unauthorized use of their personal data.