You need to be aware of the laws and restrictions that govern when getting payday loans in Florida – click here for more. When you have lots of bills to pay, unexpected expenses occurred, or there is an emergency, it is tempting to get this kind of loan. You feel that getting loans through a payday lender is the best idea right at that moment because it has minimal requirements and has a quick process. However, loans like payday loans or cash advances are governed by laws.
In Florida, it has its own set of regulations both for lenders and borrowers. In order to protect consumers, Florida law restricts the terms and interest of the loan. Lenders must comply with these terms in order for them to operate legally.
The law protects borrowers in the state. If you obtained your loan outside the state, your protection could be limited.
What are Payday Loans?
Payday loans are cash advance while you as borrowers issue a post-dated check to the lender. The payday lender gives you cash once approved. In return, you sign a repayment check that is dated to the date of your next paycheck.
Fees, Rates and Charges
The amount of post-dated check includes the principal loan amount including the interest and other fees. The lender is not allowed to deposit the check until the date written on the check. You need to know that borrowing from lending includes high fees.
This type of loan is legal in Florida. The annual percentage rate (APR) or the interest rate is 304 percent. You can borrow a maximum of $500, excluding the charges.
Unlike in other states like Illinois, people in Florida are not allowed to take more than one cash advance at a time. A 24-hour cooling period is observed between two consecutive loans. Rollovers are strictly prohibited.
In the state, payday loans are called “deferred presentment transactions.” “Deferred presentment” is the act of issuing a post-dated check for the cash borrowed now.
A new rule is expected to take effect on July 1, 2019, that will approve higher loans of up to $1, 000 with the term of up to 90 days.
Lenders must be licensed in order to provide services to the people in Florida. They must not offer more than $500 to borrowers at a time. The Florida Office of Financial Regulation strictly implements this rule to lenders.
It is also forbidden to allow borrowers to get more than one payday loan at once. In order to monitor their lending records, the applicant’s name and details are entered in the Deferred Presentment Transaction System. All licensed lenders must check the system before offering cash advance to the borrowers.
Terms
The minimum term is 7 days and a maximum of 31 days. There are finance charges of 10 percent in every $100. A verification fee of not more than $5 is also applicable.
Like in most states, rollovers are strictly banned. All borrowers must pay their debts on time. In some cases, some lenders offer a repayment plan.
Limitations
The Florida law places limits on the following:
- The amount of payday loan
- The number of loans you can take
- The fees, charges, and penalties
- The length of the term
- The process of collection if you are unable to repay
Information for the Consumers
Lenders could not sue or file criminal charges to borrowers who cannot repay their loans in Florida. Cash advances are available to Florida residents or to people who are interested in moving to the state.
Lenders have limited actions to take when a borrower fails to pay their loan. They cannot file a criminal action in the court for bad credit.
Charges or fees are limited to the 10 percent fee, $5 percent cost, and the fees incurred by the lender’s bank. Lenders cannot ask for additional charges unless it is imposed by the court.
In case borrowers fail to settle their loans on time, they are given a 60-day grace period. However, there are specific steps to take before you can use this feature.
It includes setting an appointment with a credit counseling agency within 7 days of the due date and finishing the counseling period within the 60-day grace period. You can start repaying following the plan without any added fees or charges if the credit counseling allows a repayment plan.
Avoid getting Payday Loans in Florida as much as possible. It is easy to gain additional cash through loans, but it is hard to repay. Before applying, make sure that you know the rules, limitations, terms, and the consequences if you are unable to repay.
