Here’s what you need to know about payday loans and lending in Connecticut.
Being short on cash or stuck between a rock and a hard place financially can lead you to consider a payday loan. Take a look through this guide to get a good idea about payday lending in Connecticut.
Are payday loans legal in Connecticut?
No. Payday loans are illegal in Connecticut. Rate caps in the General Statutes of Connecticut 36a-563 et seq. apply to small loans in this state, which make payday loans illegal.
Payday loans in Connecticut are illegal primarily because of the high interest rate they attract. A general opinion is that payday borrowers are more likely to have problems with their credit, which can include past due credit cards, unpaid bills and even bankruptcy. In such a scenario, getting a payday loan would only compound a borrower’s problems.
Keep in mind that if you choose to apply for any kind of loan or line of credit, it’s very important read all the paperwork (including all the fine print) before signing anything. It’s also a good idea to have a solid plan to pay back your loan, so you don’t find yourself needing to borrow more money to repay debt.
Installment loans you can apply for
If you have poor or bad creditworthiness you can consider getting an installment loan, as they are legal in the state of Connecticut. You can look at these offerings as personal loans for bad credit, though similar to short term loans, the APR will usually be quite high with an installment loan.
What other options do I have if I need extra cash in Connecticut?
While short term loans are off the table, there are other alternatives. These include:
- Apply for a credit card. Whether you have good or bad creditworthiness, there is a huge selection of credit cards worth considering if you need extra money. Credit cards also have more reasonable payments and lower interest rates.
- Tribal loans. If you live in a state like Connecticut where payday loans are illegal, you still have the option of getting one if you go through a tribal lender like SWIFT or Blue Trust Loans. Since these lenders are based on tribal land, they are considered a sovereign entity and are able to abide by their own laws.
- Payday loans from other states. If you’re in Connecticut temporarily but are normally a resident of a state where payday loans are legal, you can consider applying for an online payday loan. To do this you’ll have to provide documented evidence of your residence in another state. Also make sure the lender is backed by the OLA or similar.
- Pick up side work. Looking for side jobs, selling things online using a service like eBay or LetGo, or signing up to drive with a company like Uber are some of the many ways people get extra cash when they’re in a bind. It’s a great alternative to getting a loan or credit card because there is nothing to repay.
What are the typical costs of a Connecticut loan?
All kinds of credit come at a cost, and this holds true for the alternatives listed above. You will be subject to APR and other fees when you borrow money through a financial institution in Connecticut.
The APR you have to pay can vary noticeably from one kind of credit to another as well as from lender to lender. If you have good or excellent credit you can get a competitive APR. There’s also a few other fees you might end up paying. Find out if you have to pay any application fees to apply.
If you make late payments you may have to pay late charges. If payments don’t go through because of insufficient funds in your account lenders can charge NSF fees. Keep all this in mind when applying for a new loan or line of credit.
Have any more questions about Connecticut short term loans?
I’m a resident of Rhode Island living in Connecticut temporarily. Can I apply for a Rhode Island payday loan online?
Yes, you can, provided you can supply documentary evidence showing you to be a resident of Rhode Island.
Is a payday advance same as a payday loan, or is the former legal in Connecticut?
They refer to the same kind of credit, so getting a payday advance in Connecticut is not possible.
Who should I contact if I wish to report a lender flouting Connecticut payday loan laws?
You should report any such instance to the Connecticut Department of Banking.
Are auto title loans legal in Connecticut?
No, due to the high interest rates title loans are illegal in Connecticut.