Are Payday Loans Legal in Pennsylvania?
Short-term Payday Loans in Pennsylvania are available but with certain restrictions imposed by the Check Cashing Licensing Act of 1998, 505(a). The Payday Lending legislation covers all the parts of the process concerning:
- Payday Loan amounts
- Payday Loan repayment terms
- Payday Loan online direct lenders
- Payday Loan stores near you
- Payday Loan interest rates and other fees
- Payday Loan collecting practices
- Payday Loan default penalties
- The number of outstanding Payday Loans as well as a cooling-off period in-between etc.
Read more: PAYDAY LOANS IN PENNSYLVANIA
the Check Cashing Licensing Act of 1998, 505(a) caps all short-term loans at 6.00% APR.
For other details and information on Payday Loans in Pennsylvania contact Pennsylvania Department of Banking, 17 N. Second Street, Suite 1300 Harrisburg, PA 17101, (800) 600-0007.
Why are Payday Loans restricted in Pennsylvania?
The Government considers Payday Loans too expensive and often associated with lenders’ predatory practices. That’s why in Pennsylvania Payday Loans are limited by law. Still, there still exist some banks and online companies offering similar types of cash advance suitable to cover any unexpected emergencies.
Pennsylvania Payday Loan laws
It is not often that Pennsylvania can tout having a model law, but we currently have one of the top “payday lending” laws in the nation, protecting Pennsylvanians from being charged very high-interest rates.
Шt’s necessary to keep in mind that even if you qualify for a loan it doesn’t mean you get one. Don’t forget about the restrictions on small-dollar loans in Pennsylvania state.
However, there are no limits on the purpose of loan usage. Any urgent expenses, unforeseen bills, car repair, home repair, etc. may seem a sound reason to apply for an online Payday Loan in Pennsylvania.
If you haven’t succeeded in finding the necessary cash advance, there are always other options to receive the necessary funds in Pennsylvania: unsecured Installment Loans, bad credit Personal Loans, Title Loans, Check Cashing, Pawn Shops, etc.
Pennsylvania Payday Loans online laws
Cash advances (payday loans) from both storefront and online lenders are restricted by 6.00% APR usuary cap by the Check Cashing Licensing Act of 1998, 505(a). It also concerns online lenders which must operate in accordance with all relevant state and federal laws. Otherwise, they may be liable to Pennsylvania Department of Banking, 17 N. Second Street, Suite 1300 Harrisburg, PA 17101, (800) 600-0007 for law violations.
Bankrupt by Design: Payday Lenders Target Pennsylvania Working Families.pdf
The current Pennsylvania cap is an annual interest rate of approximately 24%, a tiny fraction of the high-interest rates that accompany traditional payday lending in other states. The Pennsylvania Supreme Court in 2010 strengthened the state’s payday lending law by ruling that online and out‐of‐state lenders must follow the law when they operate in Pennsylvania. In addition, alternative lending options exist allowing consumers to take out small loans without being charged excessively high annual interest rates.
The law obligates Pennsylvania Payday Loan lenders to provide you with a written disclosure of all the rates and fees in the understandable language. You should read them carefully and if you agree acknowledge the notification by signing the contract.
Does Pennsylvania law allow Payday Loans for bad credit borrowers?
The average credit score in Pennsylvania is 687, placing it in the fair range. But it doesn’t mean that those who have a worse credit can’t apply for the necessary cash advance in Pennsylvania.
- First of all, there’re some companies in Pennsylvania providing similar to Payday loans services to borrowers with both good and bad credit score.
- Secondly, you can always find a cosigner to increase your chances of being approved for a bad credit Payday Loan.
- Find out how to improve your credit score and do your best to do it fast.
- Or consider taking out a bad credit Installment Loan, or bad credit Personal Loan.
Pennsylvania Payday Loans news – latest changes
Some 80,000 Pennsylvanians will receive restitution under a settlement announced between the attorney general and the national online payday lender. The Government attempted to fight against an illegal online payday loan scheme. Some lenders allowed borrowers to sign up for loans and lines of credit at effective interest rates as high as 448%.
Under the settlement, all remaining loan balances are voided. In addition, consumers who repaid more than the loan principal and an interest rate above 6% will share in a multimillion-dollar restitution fund.
Pennsylvania Payday Loans historical background
| 1998 | Payday Loans were made illegal in the state of Pennsylvania. |
| 2018 | There was an attempt to legalise the payday lenders’ activity as of “pawn-brokers” but unsuccessfully. |
| Till present days | Payday Loans in Pennsylvania are prohibited. |