We can all get into financial trouble at some point. A payday loan can be easily obtained and might be the right solution for you in between paychecks.
What are the payday loan laws and regulations in Missouri?
It is legal to obtain a Payday Loan in the state of Missouri where these loans are regulated by the following law: Mo. Rev. Stat. §§ 408.500.1 et seq. The following regulations apply for all payday loans within the area of the state:
- Maximum amount of loan: USD 500
- Maximum term of loan: 31 days
- Minimum term of loan: 14 days
- Maximum Finance Rate: this is not specified
Extra Fees that apply:
- Collection fee NSF, collection costs may apply
- Finance Charge
- APR amount
- Maximum number of outstanding loans (for the same period): lender should not exceed the overall sum of USD 500 in loans, the exact number is not specified.
- Rollovers: 6 rollovers are permitted but with the condition of lender reducing the original amount by a minimum of 5% each time around.
- Collection Fees: The regulatory body for all short term loans and further credits is the Missouri Division of Finance- Consumer Credit section. Please contact them for further assistance on loan regulations.
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Payday loan may seem like an easy solution for you to pay for a check or get out of an immediate emergency. But this help may come at great cost, which oftentimes surpasses the financial limits of the debtors. The well-known debt trap is unfortunately a reality for many people in the United States who thought to only get a quick loan for a short term.
That’s why today lots of states have set up specific offices to help those who get in a debt trap the lack of control on pawn and other smaller lending companies still results in many people getting in trouble by singing contracts they haven’t properly read before.
This is why we always advise all borrowers to proceed the following way:
- Only obtain a payday loan as a last resort. Rather borrow from friend or family member if in big need.
- Only obtain a loan when you are absolutely sure to be able to pay it back totally with all the costs and interests added.
- As these loans are short haul, only borrow money you definitely really need, otherwise do not do it.
- You can only obtain a payday loan if you can confirm with paperwork that you have a proper employment and salary.
How much can you be charged by a payday lender in Missouri?
The interest rate and any additional fees added to that should always be below 75% of the total amount borrowed. This means that a USD 100 should have the finance charge of USD 75. The APR is 195% as a yearly interest rate.
Your rights as a borrower in MO
Collection costs can be specified by the lender. Lender must be a licensed company within the state in order to be able to lend money. There are several transactions which are prohibited to be performed by the lender in case they want to collect a check of debtor. Lenders are advised to keep in touch with the regulatory organization for further information and updates on loan related laws and regulations.