Payday Loan 
Title Loan 
Personal Loan 
Business Loan Payday Loans In New Jersey
Payday loans are short-term unsecured personal loans, which are usually due on the borrower’s next payday. They allow borrowers to borrow to cover pressing financial needs using their own income as collateral. Loans typically range from $100 – $2,000 and can be repaid in installments according to your monthly paycheck. Payday lenders charge interest rates of around 1% for loans up to $100 and 25% for larger amounts, though these rates vary significantly between lenders.
New Jersey has taken an aggressive stance against payday lending by banning it outright; however, other states have not followed suit, leaving many consumers without access to these types of loans that would otherwise qualify based on their incomes.
Are Payday Loans Legal In New Jersey?
Yes, payday loans are legal in New Jersey, but they are limited to small amounts. State law prohibits lenders from charging rates that are higher than 10% for loans of $500 or less and 25% for larger amounts. Interest rates for loans made under $500 can be as high as $15 per $100 borrowed, according to the Consumer Federation of America.
Are Payday Loans Regulated In New Jersey?
New Jersey does not have any explicit regulations on payday lending itself. Instead, state law generally requires lenders to maintain certain licensing requirements to operate within the state. Though payday loans are technically legal in New Jersey, the New Jersey Department of Banking and Insurance (DOBI) has taken an aggressive stance against them by limiting the dollar amounts that can be lent. The department has also indirectly limited the types of fees that can be charged by requiring loan agreements to include all costs associated with obtaining a loan before it is approved. These regulations make it difficult for payday lenders to operate in the state; however, they are still operating today.
Are There Any Other Short-Term Options In New Jersey?
Yes. New Jersey does not have a statewide payday lending statute, but individual municipalities have taken action against the practice. In 2008, the city of Atlantic City filed a lawsuit against 100 payday lenders operating within its borders for violating its interest rate cap ordinance. The city settled the case in 2010 by entering into an agreement with 12 lenders to cease operations within Atlantic City and to pay a total of $25 million in civil penalties, attorney fees, and costs. No other agreements were reached with other lenders that were operating illegally in Atlantic City. Additional municipalities, including Newark and Jersey City, are considering similar measures against banks that are operating payday lending operations within their borders.
What Other Options Do I Have In New Jersey?
If you need to borrow money, consider other options, such as taking out a personal loan from a bank. Unlike payday loans, personal loans can be used to cover any type of expense, and they typically have terms that range from one month to several years. If you default on your loan, the lender can seek legal recourse against you and obtain a judgment against you if needed. The lender may also be able to garnish your wages or obtain a lien on any real estate property that you own.
How Much Do Other Loans Cost In New Jersey?
Personal loans can be costly in New Jersey. Rates for a typical loan for a consumer with a good credit score range from 4% to 16%. Depending on the length of the loan, the fees and interest rates will be different. For instance, if you borrow $6,000 for 36 months, you will pay $2,000 in fees and interest over the term of the loan. The final cost of your loan will depend on factors such as your credit score and your loan-to-value ratio. A high credit score will help improve your chances of qualifying for a lower interest rate and better terms on your loan agreement.
FAQ
Yes. You can apply for a payday loan online, but you must be at least 18 years old and have an active checking account to receive your funds electronically. Online loans are only available in New Jersey; however, they may be useful if you need quick access to cash and lack access to traditional lending sources like banks or credit unions.
The Division of Banking and Insurance is the state agency that regulates financial institutions in New Jersey.
Auto title loans in New Jersey are legal, but the state limits the interest rate that can be charged for these loans to 36%. Auto title loans are short-term financing options in which a lender takes an auto title as collateral in exchange for a loan. You can borrow up to 80% of your car’s value, and the loan must be repaid in full by your next car insurance payment date.