Minnesota Payday Loan Laws and Legislation
The state of Minnesota allows the operation of payday lending businesses according to the Minn. Stat. § 47.60 et seq.
People seeking the assistance of such companies however, should be pretty careful as these loans are expensive. The activity of payday loan companies is regulated and monitored by the state laws. Such measures are taken in order to protect the residents of the state from indecent lenders. According to the Minnesota legislation payday loans in the state are allowed for a period of no more than 30 days. Lenders are prohibited to grant loans exceeding the amount of $350. There is a particular distinction in interest rate cap in regards to the amount of a loan. In case a borrower takes a loan up to $50, he is charged $5.50; for loans from $50 to $100 the fee is $5 with 10% interest rate; for loans from $100t to $250 the charge amounts to 7% of the borrowed amount and a fee is $5; finally, for greater loans from $250 to $350 the fee is the same - $5 and the interest is 6%, which amounts to $17.50 APR minimum.
Borrowers are allowed to take as many loans as they need, there are no limitations here. However rollovers or any extensions are not allowed and it is forbidden to take out a loan form a different lender in order to repay the previous debt.
Chapter 47.60 of the existing legislation has got other regulations concerning the operation of payday lending businesses. All the laws passed in this sphere aim at protecting the borrowers and their incomes. Such limitations are not welcome with some lenders and even with some consumers, however, it is done for the best and all the lending institutions are obliged to comply with the existing law if they want to continue their activity in the state.
The requirements to get a payday loan are not really strict. A borrower has to be of age (18), permanently employed and with an income not less than $1,000 a month. There are lenders who accept applications with less income and regardless of the state of employment. Payday lenders charge pretty high, however, they offer far more convenient and beneficial terms for their applicants than many banks do. One of the most significant distinctions is that people with poor credit history, who have no hope of getting a credit in the bank, are approved for payday loans without problems. Still, it is very important to know the laws of the state and make sure you are dealing with a decent lender.
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