Payday loan laws can be tricky, but we’re here to guide you.
Payday loans can be a good way to work through a fianncial setback, but the laws surrounding them can be tricky. If you’re a resident of Minnesota, we have a breakdown of everything you need to know before applying.
How much can I borrow in Minnesota?
Minnesota Statutes 47.60 et seq. governs payday loans in Minnesota, which requires all payday lenders to be registered and abide by the maximum fee guideline detailed below.
Here are the quick facts about payday loans:
- Maximum loan: $350
- Maximum loan term: 30 days
- APR: A 14-day $100 loan has an APR of 390%
- Collection fees: A lender may charge a $30 NSF (non-sufficient funds) fee
The amount you’ll be charged in interest varies depending on the amount of your loan.
- $50 or less: $5.50
- $50.01 to $100: 10% + $5 administrative fee
- $100.01 to $250: 7% (minimum of $10) + $5 administrative fee
- $250.01 to $350: 6% (minimum of $17.50) + $5 administrative fee
- Default: 2.75% per month on the remaining loan amount
There are multiple lenders offering payday loans in Minnesota
Check the websites of any providers you’re interested in to confirm they operate in Minnesota.
What you need to qualify for a loan
All payday lenders will require you to be at least 18 years old, be an American citizen or resident and have a regular monthly income of at least $1,000.
When you begin your application, be prepared to supply your Social Security number,
What should I consider before taking out a loan?
Although payday loans can be a great way to get ahead when you’re having financial troubles, there are other ways you can get help with your bills or get financing without taking on this high-cost form of debt.
Minnesota has an Energy Assistance Program, a Food Support Program and a Medical Assistance program that can help with large bills and everyday expenses. In addition, you can consider other forms of non-credit funding, such as requesting a pay advance from your employer or ask a friend or family member for help.
If you have a credit card, you can take out an advance on your remaining line of credit. You may also want to consider another type of short-term loan, like an installment loan, so that you have longer to pay back what you owe.
When you’re in a rough spot financially, you might be considering a payday loan. These can be great for making it between paychecks, but they are costly. Be sure to consider how much the total will cost and the other options you have before applying.
Have any more questions about payday loans?
Who do I contact if I have a problem with a payday lender?
You should contact the Minnesota Department of Commerce.
How much time does it take to apply for a payday loan?
No matter if you apply online or in-store, as long as you have the required information, the process shouldn’t be more than 5 to 10 minutes.
Is there a prepayment fee?
No. If you want to repay your loan early, you won’t be charged a fee for prepayment.
How many payday loans can I get concurrently?
There is no limit on the number of payday loans you can have at any given time, but keep in mind that having multiple payday loans at the same time can lead to extra debt and difficult repayment schedules.
Can I rollover or refinance my loan?
No. You can’t use one loan to pay off another by the same lender.
Is there a cooling off period between loans?
No. Minnesota law doesn’t specify any cooling off period.
Can I get a repayment plan?
While Minnesota doesn’t require a repayment plan, you may still be able to request one from your lender if you’re having trouble paying back your loan.