Regulation of ayday loans in Idaho

Those customers who need money really fast can use payday loans, which can be identified as short-term advance credit. However, these loans are not cheap because of their high financial fees and percentage rates. They are also to be paid back on time.

The Department of Finance and the Idaho Code Ann. § 28-46-401 et seq. (Credit Code) are presently regulating payday lending business in Idaho. It is recommended to borrowers not to resort to payday loans at once and to think over all lending alternatives, as these short-term loans are very risky and may be a reason for more serious financial issues. In addition, the Federal Trade Commission advises not to take too large loan’s amounts, as a borrower can find himself in a debt cycle by doing this.

Under the Idaho legislation, there are no time limits for giving payday loans. All payday lenders can set any interest rates and charge any financial fees they like as well. Thereby, annual percentage rates for a 2-week payday loan which makes up $100 vary from lender to lender. But, generally, they are extremely high.

As it was mentioned above, the Credit Code of Idaho and Regulation Z of Truth in Lending Act contain all the information about payday lending issues in Idaho. In accordance with the latter act every payday lender in the State is to offer details about its services, terms and conditions to a customer. Additionally, in order to legally operate in Idaho all payday lenders are to satisfy the following criteria:

1. A lender should hold a license.

2. It isn’t allowed to provide a loan which sum exceeds $1,000.

3. A borrower can get unlimited number a payday loans at a time (but the overall amount of the loans shouldn’t make up more than $1,000).

4. All the financial fees are to be charged in US dollars (this point should be stated in a loan agreement).

5. A lender must clearly explain to a borrower that the loans are given for a short term and are to be paid off till the deadline.

6. A client should be aware that all rollovers and renewals of a loan are accompanied with extra charges.

A borrower is allowed to terminate a loan contract no later than at the end of the day following the day when the agreement was concluded. Under the state legislative acts payday lenders can ask their customers to pay unlimited fees for a loan. Generally these issues are coordinated between the parties. Loan amount, interest rate, charges and fees, annual percentage rate and all other conditions should be precisely stated in the contract.

It is prohibited to borrow a new loan in order to pay back the previous one from the similar payday lender in Idaho. Under the law lenders must be ready to accept collateral from a borrower, for example some property. A payday loan is allowed to be extended for 3 times. After a rollover period comes to an end, a borrower is to repay a loan. Payday lenders are forbidden to accept extra payments for the loan except for initial financial charges.

Criminal activities against payday borrowers are not allowed in the State. Charges for non-sufficient funds are not to be more than $20 or 12% per year

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