Understanding Payday Loans in Delaware and Arkansas
Payday loans are a type of short-term loan that are typically taken out by borrowers who need quick access to cash to cover unexpected expenses or emergencies. These loans are typically due on the borrower’s next payday and are often easier to obtain than traditional loans.
In this article, we will discuss the regulations and laws surrounding payday loans in Delaware and Arkansas.
Payday Loans in Delaware
In Delaware, payday loans are legal and regulated by the Delaware Office of the State Bank Commissioner. This means that borrowers who need access to cash quickly can easily apply for a payday loan and receive the money they need within a few hours.
However, it’s important to note that there are limits on the amount a borrower can borrow. In Delaware, borrowers can only borrow up to $1,000 or 25% of their monthly income, whichever is less. Additionally, the term of the loan cannot exceed 60 days.
Delaware also has regulations in place to protect borrowers from excessive interest rates and fees. The interest rate on payday loans in Delaware is capped at 100% per annum, and lenders cannot charge more than 1.08% in fees for each $100 borrowed.
Interesting Facts about Payday Loans in Delaware
- Delaware is home to more than 200 payday lenders.
- The average payday loan amount in Delaware is $350.
- Delaware payday lenders charge an average annual interest rate of 521%.
Payday Loans in Arkansas
Unlike Delaware, payday loans are prohibited in Arkansas. The state’s usury laws prohibit loans with an interest rate above 17%, effectively banning payday loans from being offered in the state.
While there are no legal payday lenders in Arkansas, some lenders have attempted to get around the state’s regulations by offering loans that are structured as “fee-based credit service organization” transactions. These loans, however, have been met with legal challenges and are not a viable option for people who need access to quick cash.
Interesting Facts about Payday Loans in Arkansas
- Arkansas banned payday lending in 2009.
- In 2016, the Arkansas Supreme Court ruled that the state’s usury laws apply to out-of-state lenders who offer loans to Arkansas residents.
- A study by the Arkansas Advocates for Children and Families found that Arkansans pay over $25 million in fees and interest to payday lenders each year.
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