Learn How Your Cash Advance Loan Is Protected by the USA law

Although laws and regulations can be somewhat restrictive, they are meant to protect an ordinary consumer from abusive lending practices. Some states don’t regulate fast cash advance loans at all and therefore scams and extremely high interest rates are more prevalent there. Let’s find out the things that protect you against predatory lending in the US.

Problems

  • There’s a narrow range of products for people who live in states where fast cash advance loans are prohibited altogether. You are restricted to choose the lenders that carry on their activity outside your state.
  • Scammers who do this for a living can make it hard for you to spot them and even a thorough background check can’t warn you. Usually, if you can’t find anything good or bad about any business, it’s better to move on to the next provider just to be safe.
  • There are lenders who abuse their power and don’t abide to state laws. It is important to be informed about the regulations in your own state to avoid any bad deals. Here are the things you should check if they reside within the legal limits:
  • Interest rates – average: 15$ for $100 borrowed.
  • Fees (both types and amount) – some states prohibit any upfront fees or set a limit for the maximum amount of fees per loan. This limit is either a fixed number or a percentage of the borrower’s monthly salary.
  • Maximum amount borrowed – the average cash advance loan in the US is $500, but you can borrow as much as $1000 in some states.
  • The ability to roll-over the loan and how many times that’s permitted – there are states that prohibit roll-overs completely while others set a limit, for example 4 roll-overs per loan.
  • The right for an extended payment plan once a year.

Solutions

Here are a few institutions that regulate fast cash advance loans :
  • The Federal Trade Commission – here you can report any fraud including the ones about fast cash advance loans.
  • The Better Business Bureau.
  • The Consumer Financial Protection Bureau.
In order to keep up with your fast cash advance loans you have several options:

Apply for an extended payment plan (you have this option once in 12 months)

  • 4-6 installments over 60 days without any added interest.
  • Beware of early payment fees if you want to pay the loan in full once you got an EPP.
  • You can’t apply for another fast cash advance loans for 90 days after the EPP, so make sure you won’t need such a loan in the nearest future. There are of course ways around this:
  • You can convince a close friend or a relative to take a loan for you;
  • You can turn to other types of short loans although they are not as beneficial as fast cash advance loans :
  1. Car title loans;
  2. A small line of credit that you will pay off in a couple of months;
  3. Loans from credit unions:
  • They are harder to find;
  • Few ATMs and subsidiaries;
  • You have to belong to a certain community to be eligible.

Loan renewals

You pay more interest, but you double the time remaining to repay the loan.

Choose installments

These are different from EPPs because they are given by the lender and are not required by law. The lender either has some specific eligibility criteria or gives this option for some deals only. You should be notified in advance about the possibility to pay off fast cash advance loans in several small installments.

Conclusion

Fast cash advance loans are strictly regulated by several organizations. Add the thorough background check that you should perform on every loan offer prior to borrowing, and you will be safe from predatory lending.