What are your loan options in Delaware?
Payday loans were originally created as cash based loans of small sums in order to help those out who really needed the money and could not wait until their next payday. Due to the nature of this loan, it is not provided by banks but specific loan companies and pawn shops.
Therefore, this loan often comes with a high interest rate. Everyone who opts for this sort of loan in any state where it is legal is advised to choose a licensed lender who won’t abuse the rights of the borrowers.
Due to all the predators in this business, there are several states which decided to put a ban or strict regulations on all cash loans such as a payday loan. However, this type of loan is in fact available in Delaware.
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What are the payday loan laws and regulations in Delaware?
Payday loans are regulated by the Delaware Code Title 5 Chapter 22 § 2227 according to which every official lender must hold a state license in order to be considered a legal lender company.
Let’s enlist some of the laws and regulations of payday loans in Delaware:
- The maximum amount of a payday loan should be 500 USD per loan. One borrower can opt for a maximum of two payday loans within the same repayment period and the overall sum should not be more than 1000 USD.
- There is no minimum term defined but the maximum loan term is 60 days which means this is in fact a real payday loan that the borrower is advised to pay back upon the arrival of their salary.
How much can you be charged by a payday lender in Delaware?
There are no regulations on maximum interest so it’s in the interest of the borrower to find a company that offers this loan with the best possible conditions.
Your rights as a borrower in DE.
Borrowers do have the right:
- To choose the company that offers the best and lowest interest and best conditions of this loan
- To opt for a rollover or refinance 4 times per loan
- One person can opt for a Payday loan 5 times max within a one year period
- Ask for a Repayment plan but this depends on the lender company
- To step back from getting a payday loan even after they sign a contract, if they step back before the end of the business day on which they receive the full amount.
Although a payday loan is legal for everyone above the age of 18 who are officially employed and have the paperwork as evidence, the state highly advises everyone to check out any other options, such as state wide aid and support programs which can also be of big help for those in need.
Be aware as there is no upper limit to the interests a lender may charge and thus it makes this sort of loan a very risky and costly one. On top of APR interests lenders also charge a financing fee, a collection fee and in case the borrower opts for a rollover, additional rollover fee also applies.