When it comes to payday loans in West Virginia, the situation is clear: they are prohibited by state law. However, payday loans are still widely available in the neighboring states of Virginia, Kentucky, Ohio, and Pennsylvania, which are collectively referred to as Four States. In this article, we will explore the landscape of payday loans in Four States and discuss how West Virginia’s prohibition affects borrowers in the region.
The Four States Landscape
Payday loans are small-dollar loans that borrowers typically repay with their next paycheck. Despite their convenience, they are notorious for their high interest rates and fees. Four States have various regulations regarding payday lending, ranging from restrictive (like West Virginia) to permissive (like Kentucky).
According to the National Conference of State Legislatures, here are the main features of payday loan laws in each Four State:
- Virginia: Maximum loan amount is $500; maximum loan term is two pay periods; maximum financing fee is 36% annual percentage rate (APR) plus a $5 verification fee.
- Kentucky: Maximum loan amount is $500; maximum loan term is 60 days; maximum financing fee is $15 per $100 borrowed.
- Ohio: Maximum loan amount is $1,000; maximum loan term is 90 days; maximum financing fee is 28% APR plus a $20 maintenance fee.
- Pennsylvania: Maximum loan amount is $1,000; maximum loan term is 12 months; maximum financing fee is 6% APR plus a $5 fee.
Note that these are just the maximums allowed by law, and lenders may offer lower amounts or shorter terms. However, these numbers give you an idea of how different Four States approach payday lending.
The Impact of West Virginia’s Prohibition
Although West Virginia’s Attorney General has taken legal action against out-of-state lenders who target West Virginia residents online, payday loans are still available in Four States. This means that West Virginia borrowers may be tempted to cross the state line to get a payday loan, despite the risks and the fact that they will be breaking the law.
Moreover, West Virginia’s prohibition does not apply to other types of loans that may be just as predatory, such as car title loans and installment loans. These loans may have terms and fees that are similar to payday loans, but they may be legal in West Virginia and Four States.
Interesting Facts and Statistics
- In 2020, Virginia borrowers took out 1.3 million payday loans worth $251 million, according to the State Corporation Commission.
- In Kentucky, payday lenders garnished wages from 12,000 borrowers for a total of $24 million in 2019, according to a report by the Kentucky Center for Economic Policy.
- Ohio’s payday loan industry made $184 million in fees in 2019, according to a report by Policy Matters Ohio.
- In Pennsylvania, the number of payday lenders decreased from 1000 in 2009 to 201 in 2019, according to a report by Keystone Research Center.
Apply Now
If you are a resident of Four States and find yourself in need of a short-term loan, apply now through TheGuaranteedLoans website. Our connector service will match you with potential lenders who may offer payday loans, car title loans, or installment loans, depending on your situation. It is important to note that TheGuaranteedLoans is not a direct lender and we do not make credit decisions. However, our service is free and we strive to connect you with reputable lenders who comply with state and federal laws on consumer lending.
In conclusion, the legality and morality of payday loans are hotly debated. Nevertheless, it is crucial that borrowers be informed of the risks and costs associated with these loans, and that they explore all possible alternatives before taking out a loan. Remember that Four States have different laws and regulations regarding payday lending, and that West Virginia’s prohibition does not mean that payday loans are not available nearby. By using TheGuaranteedLoans service sensibly and responsibly, you can make an informed decision about your financial needs.