Payday loans Michigan - Payday Advance Credit ™ USA
Cash Advance loan or Payday Loans are the common terms used to describe deferred presentment service transactions under the Michigan Law. A Payday Loan transaction is short term, small and high cost arrangement where the borrower gives the lender a cheque for covering the service fee and the payday loan amount. In return, the lenders provide the borrower with almost immediate cash, money order or cheque in accordance with the borrower’s needs. Typically the repayment is to be made from the next pay check of the borrower. In order to qualify for this loan type the borrower needs to have a checking account, a personal identification, and a proof of anticipated regular income from their job.
Payday loans are considered to be legal in the state of Michigan in accordance with the Michigan Comp. Laws 487.2121 et seq. however these loans have certain limitations that are to be considered by both the borrowers and the lenders. The maximum loan amount that can be taken from a single lender has been limited to $600. The borrowers are not allowed to have more than 2 loans outstanding from the same lender, although with different lenders they can have more.
Payday loans cannot be given for a time period above 31 days and after the completion of this time period no extensions are allowed. In case the borrower is unable to repay the loan in the given time period and he has a total of 8 outstanding loans for a period of 1 year, then an instalment payback plan must be requested. Basically, the lender will charge about $15 for providing such services. Moreover the lender can also legally charge an insufficient funds fee of $25 if you defaulted on the repayment. Even after the fee the borrower is still responsible for making the repayment and can be subjected to collection actions from the lenders.
The interest rates in the state of Michigan can be as follows – A 15% charge for the first $100, the second $100 is provided at a 14% charge, 13% charge for the third $100 and a 12% charge for the fourth $100. All loans for amounts above $400 are issued at 11% charge. Some lenders can charge a verification fee as high as 45%. Also the stated APR for a $100 loan for a 2 week period cannot go over 390%.
Also if a borrower feels that the Payday advance Michigan lender is not operating in accordance with the law, the former is eligible to notify the latter with a written letter about the same. In such a situation the lender has a 3 day period to make a decision. If the lender admits the violation, then he must pay the borrower about 5 times the fee amount associated with the loan.
In the state of Michigan or United states for that matter the debt collection practices are governed by the FDCPS or the Fair Debt Collection Practices Act. According to this statute, the debt collectors cannot lie to the borrowers. They cannot threaten you for collecting the debt. If they violate this law, the borrower can often sue the lender.