Iowa Payday Loan Laws and Legislation
In is not uncommon that people occur in a difficult financial situation and need money to cover some unexpected expenses. Families that live from paycheck to paycheck are numerous in the country and it can always happen so that you may require money urgently and there is nowhere to take it.
Payday loans are short-term loans that are given at high interest for a limited period of time to everyone who appear to need them. In every state there are laws that regulate payday lending businesses and everywhere they are a little bit different. All the laws have the aim to protect the borrowers form indecent lenders. Payday lending is legal in the state of Iowa according to 2 Iowa Code Ann. § 533D et seq.
Basically, almost everyone is eligible to apply for a payday loan. The requirements are rather few such as a permanent income source and a checking account. In Iowa a person should be at least 18 years of age and be able to prove it with an ID. As it has already been said, a checking account is needed; a person should be employed as well at least for some period of time. In some cases other proofs of income such as social security funds suffice.
According to the laws of Iowa a borrower is not allowed to get more than $500 loan. The maximum period for a loan when it should be repaid is 31 days. A lender is not allowed to charge more than $15 for a loan of $0-$100 in terms of finance charges and fees. It is also allowed to charge $10 more on every $100 borrowed thereafter. APR equals 433% for every $100 borrowed for a fortnight.
It is allowed by the law to have no more than two outstanding loans at a time. However, rollovers or extensions are not allowed and it is required that a borrower should make a full repayment in time. A lender is allowed to charge not more than $15 as a non-sufficient funds fee as well as for a returned check. At the present moment the state law of Iowa has no definite regulation concerning criminal action against default payments. One thing is prohibited - a lender is not allowed to threaten to a borrower with criminal prosecution in any way.
However, there are definite regulations on the following account: a borrower should get a detailed contract written both in English and Spanish with all the containing information about payday loan transactions, fees and terms of repayment and so on. The contract should be written in layman's terms and should contain full contact information of a lender as well as a toll free number to contact in case of any problems and questions. Only if all the above mentioned terms are complied with, a payday lending operation is considered legal. A borrower is also obliged to provide the contact information in full to a lender.
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