Legal Interest
We’ve all paid our fair share of interest on our PDLS… The Payday loan company calls it a finance charge or a rollover fee. The sad part is none of these fees are ever applied to the principal balance. So you’ve paid $590 on a $200 loan…thats more than double the principal. You’ve realized it, you want out, what to do now?? First things first, lets figure out what the legal interest is in your state. I’m using Connecticut as an example (its my state). Connecticut doesn’t have any specific legislation with regards to payday loans. They do, however, have a small loan law and a usury cap.
CT Small Loan Law:
No one other than a bank, credit union, or pawnbroker can make small consumer loans up to $15,000 in Connecticut at a rate higher than 12% a year, unless they become licensed with the Banking Department as a small loan lender. If they become licensed, they can charge 19.8% on open-end loans. For closed-end loans, they can charge (1) $17 per $100 for the first $600 and $11 per $100 for the remainder of loans up to $1,800 or any loan that is unsecured or secured only by credit life insurance and (2) $11 per $100 on secured loans over $1,800. CGS § 36a-563, § 6a-565).
Payday loans are considered closed end, so the interest rate is 17% on the first 600$ then 11% for every $100 thereafter, up to $100. (Rollovers are prohibited in CT).
So - I took out a $200 payday loan. I paid back $590 on this loan. What was/am I legally obligated to pay?
200$ x .17 = $34 interest + 200$ principle = $234 prinicple + legal interest
That meants you’ve over paid by $356!! Its time to write your lender….
Whats the legal interest in your state?
(per $100 borrowed)
Alabama:
17.5% per 14 day period
Alaska:
20% per 14 day period
Arkansas:
22.22% per 14 day period
California:
17.65% per 14 day period
Colorado:
20% per 14 day period
Connecticut:
17% per 14 day period
Deleware:
No limit on interest….ouch
Florida:
15% per 14 day period
Georgia:
16% per year (10% per year discounted plus fees); 60% per year criminal usury cap
Hawaii:
17.65% per 14 day period
Idaho:
No limit…
Illinois:
15.5% per 15 day period
Indiana:
15%: $0-$250; 13%: $251-$400; 10%: $401-$500
15% per 14 day period
Iowa:
16.67% per 14 day period
Kansas:
15% per 14 day period
Kentucky:
17.65% per 14 day period
Louisiana:
25% per 14 day period
Maine:
30% per year on amounts up to $2,000 or a fee of $5 for amounts financed up to $75; $15 for amounts financed $75.01-$249; or $25 for amounts financed of $250 or more.
Maryland:
2.75% per 30 day period
Massachusetts:
23% + one time 20$ fee
Michigan:
15% of first $100, 14% of second $100, 13% of third $100, 12% of fourth $100, 11% of fifth $100, 11% of sixth $100
15% per 14 day period
Mississippi:
22% per 14 day period
Missouri:
75% per 14 day period (OUCH)
Montana:
25% per 14 day period
Nebraska:
17.65% per 14 day period
Nevada:
No limit (after default prime rate + 10%)
New Hampshire:
No Limit
New Jersey:
30% per year
New Mexico:
No Limit
New York:
25% per year
North Carolina:
36% per year
North Dakota:
20% per 14 day period
Ohio:
15% per 14 day period
Oklahoma:
15% per 14 day period
Oregon:
No Limit
Pennsylvania:
24% per year
Rhode Island:
15% per 14 day period
South Carolina:
15% per 14 day period
South Dakota:
NO Limit
Tennessee:
17.65% per 14 day period
Texas:
12% per 14 day period
Utah:
NO Limit
Vermont:
18% per year
Virginia:
15% per 14 day period
Washington:
15% per 14 day period
Washington DC:
16.10% per 14 day period
West Virgina:
31% per year
Wisconsin:
No Limit
Wyoming:
30% per 14 day period