What You Need to Know About Missouri Payday Loans?
The entire law concerning payday loans (a.k.a. "small, small loans"), which are loans of $500 or less. Such lenders must be licensed by the Division of Finance. This type of lender to a host of consumer safeguards, i.e., places a 75 percent cap on interest and fees on the initial loan and renewals, limits renewals to no more than six, limits the term of the loan to 14-31 days, applies daily interest calculations, etc. Additionally, the lender must conspicuously post rates and a borrower who repays a loan before the close of the lender's next full business day pays no interest or fees. Other Missouri Payday Loans informations you must know:
Maximum Loan Amount.
A consumer can borrow in a payday loan cannot exceed $500.
Annual Percentage Rate (APR).
FEE (Origination fee + Interest) divided by AMOUNT FINANCED divided by NUMBER OF DAYS OF TERM OF NOTE multiplied by 365 multiplied by 100 (this will put your decimal place in correct place) = APR
For example: $15 / $100 / 14 X 365 X 100 = 391.07 APR ($100 loan for 14 days with $15 fee)
$12.50 / $50 / 14 X 365 X 100 = 651.79 APR ($50 loan for 14 days with $12.50 fee)
What is Missouri payday loans regulations?
- * Requires loans to be unsecured and $500 or less.
- * Creates minimum and maximum loan terms of 14 and 31 days respectively.
- * Requires a license from the Division of Finance.
- * Requires Truth in Lending and Regulation Z disclosures.
- * Requires the borrower’s signature on all loans, extensions, or renewals.
- * Limits collection costs to court costs and attorney fees awarded by the court.
- * Requires the lender to conspicuously post the maximum annual percentage rates currently being charged and a statement concerning the short-term nature of the loans.
- * Lenders must consider the borrower’s ability to reasonably repay the loan and must retain records for at least two years.
What borrowers need to know?
- - You may cancel this loan without costs by returning the full principal balance to the lender by the close of the lender's next full business day.
- - Limits the number of renewals to six and requires a five percent reduction of the original principal amount commencing with the first renewal.
- - Limits the total amount of accumulated interest and fees to 75% of the initial loan amount for the life of the loan including all renewals.
- - Prohibits a loan from being repaid by a loan from the same lender or an affiliate and limits the aggregate of loans from a lender and affiliate to the same borrower to $500. The lender may comply with this section by having the borrower sign a statement certifying that the above conditions are true.
Filling a Complaint.
Consumers can file a complaint against institutions within Division of Finance jurisdiction by submitting an online or paper complaint form by email, mail or fax. Be sure to print a copy for your records. We will review the facts in the complaint form and determine if there is a violation of Missouri law. Complaint Form and Other Missouri Payday Loans Law.
All information is preliminary. We gathered them from various documents. It may be amended, modified or canceled without notice, so if you would like more information, please contact: Missouri Division of Finance.