Iowa payday loan laws are actually in the middle of the list when it comes to protecting the borrower.
While some parts are good for the borrower, the interest rates are still out of the park.
They allow roll overs, which can cause serious financial hardship if you let the loan get out of hand and do not pay it up right away.
The length of a payday loan in Iowa may not exceed 31 days. The loan amount caps out at $500.00 and lenders must not exceed this amount.
While that may sound good you are allowed to have more than one payday loan as long as none of them exceed $500.00.
This is a bad set up for a payday loan trap because if you do not keep up with the first loan, the temptation to take out another to catch up with the first one is too strong to say no.
Then something else happens and you are already in trouble with the first two, See the trap forming? Interest rates in the state of Iowa are $15.00 on the first $100.00 borrowed and $10.00 on every $100.00 borrowed over the first $100.00.
The payday loan laws in Indiana are anything but borrower friendly and care should be used in this state when dealing with payday loans.
The first red flag is the interest rates.
Payday loan companies are allowed to charge 15% on loans up to $250.00,13% from $251.00 to $400.00 and 10% on $410.00 to $500.00. The loan cap per payday loan is $500.00.
These kinds of rates add up fast and are extremely high. For example, on a 14 day $100.00 loan the APR is 390%.
The second red flag to watch out for is the loan amount allowed. While the loan may not exceed $500.00 the law does allow the lender to borrow you the whole amount of your paycheck as long as it does not exceed $500.00
This will not leave much left for repayment of the loan and is just plain crazy.
The path down the payday loan trap becomes real easy under these terms, and before you know it you are in serious financial trouble.
One other point to remember is Indiana payday loans are to be a minimum of 14 days.
Illinois payday loan laws are set up to favor the lender, and one needs to be aware of these laws before a person takes a payday loan out.
The loan companies are allowed to write payday loans for between 13 to 45 days.
This coupled with the interest rates allowed, $15.50 per $100.00 borrowed, and the amount allowed to borrow, $1000.00 or 25% of the borrowers gross income, whichever is less, can lead to a one way trip to the payday loan trap.
A 14 day $100.00 loan comes out to an APR of 403%. This is a crazy APR and one should avoid these types of loans at all costs.
One good thing is payday loan lenders in Illinois are not allowed to write more than one loan at a time, so this does help curb the stacking of loans by any one borrower.