| Payday Loans Legal? |
Yes |
| Legal Citation: |
Wash. Rev. Code § 31.45.010 et seq. |
| Terms
of Payday Loans: |
-> Maximum Loan Amount = $700
-> Loan Term = Maximum 45 days
-> Maximum Finance Charge = 15%: first $500;
10%: remaining portion of the loan in excess
of $500 up to the $700 maximum
-> Finance Charge for 14 day $100 Loan =
$15
-> APR for 14 day $100 Payday Loan = 390% |
| Limits of Debt: |
-> Maximum # of Outstanding Loans: A company
cannot hold a check or checks in an aggregate
face amount of more than $700 plus allowable fees
from any one borrower at any one time.
-> # of Rollovers Allowed: 0
-> Repayment Plan : A company and a borrower
may voluntarily enter a payment plan at any
time. A borrower, however, has a right to convert
a small loan to a statutory payment plan after
four successive loans and prior to default on
the last loan.
-> Cooling-Off Period: |
| Debt Collection Limits: |
-> Collection Fees: $25 NSF Check fee
+ Attorney/Court fees
-> Criminal Action: Not allowed
|
| Where to Get Information? |
-> Regulator: Washington Department of
Financial Institutions (Visit
their Website)
Address: Division of Consumer Services, PO
Box 41200 Olympia WA 98504
Phone: (360) 902-8700
Fax: (360) 725-7827
Regulatory Contact: Chuck Cross, Director of
Consumer Services
Important Links
-> Database
of Payday Loan Companies
-> Complaints
& Disputes
-> Download
Complaint Form (PDF) |
i) APR (Annual Percentage Rate):
The Annual Percentage Rate (APR)
is an interest rate that is different from the Finance
Charge. The APR was developed to gauge the "true
cost of borrowing a loan." The finance charge
is a mere interest rate e.g 8% that does not provide
a lot of useful information. However, the APR does.
Here are the components (finance charges) included
in APR:
-> Loan processing fees
-> Underwriting fees
-> Document preparation fees
-> Private mortgage insurance
-> Pre-Paid interest charges: The interest charged
from the date of closing a loan to the end of the
month (when payment is due).
-> Points - Discount & Origination Points
The following items are NOT included
in the Annual Percentage Rate (APR) calculation:
-> Title or abstract fee
-> Appraisal fee
-> Escrow fee
-> Attorney fee
-> Notary fee
-> Document preparation fees
-> Home inspection fees
-> Recording fees
-> Transfer taxes
-> Credit report look up fees
2) Cooling-Off Period
A Cooling-Off Period is when all
loan clients receive a 3 (three) business day cooling-off
period during which clients can change their mind
about the agreement and exit or cancel with only
a specified fee. A business day is any day that
is not a Saturday, Sunday or public holiday.
3) NSF Check (Non-Sufficient Funds)
An NSF check is when a check is
dishonored because the Payor does not have sufficient
funds in his/her bank account.
4) Loan Term
The loan term is the length of
time after which the loan is due. For example, if
the loan term is 30 days, the loan becomes due after
30 days of initial borrowing date. |
