A payday loan may be simple to get, but make sure you know the laws first
If you’ve fallen on hard financial times, you might be looking into a payday loan. As an Ohio resident, you should be sure to confirm that you’re being charged the right interest rate and that the terms are something you can afford.
Get a convenient payday loan, installment loan or line of credit with fast funding, depending on your state of residency.
- Loan Amount: Varies by state
- Turnaround Time: As soon as 1 business day
- Simple online application
- No hidden fees or paperwork
- Dedicated customer service
- Confidential and secure
How does payday lending in Ohio work?
Payday lending is legal in Ohio under the Ohio Revised Code Ann. 1321.35 et seq., however there are no lenders officially licensed under these statutes. Instead, lenders register as small loan lenders (versus short-term lenders) in order to avoid the interest rate cap of 28%.
This means that Ohio lenders skirt the law and often charge well over 600% APR.
In order to protect yourself from predatory lending, be sure your lender is following these official regulations:
- Maximum loan amount: $500
- Loan term: 31 or more days
- APR: 28%
- Finance charge: A loan costs $1.08 per $100
- Collection fees: $20 collection charge
If you default on your loan, a lender may also charge you for court costs and possible damages.
Careful of lenders that sidestep legal limitsOhio payday lenders can’t charge more than 28% for a loan, but almost all lenders register under the Ohio Small Loan Act to avoid this interest cap. This loophole means that payday lenders can charge some of the highest interest rates in the country. Some lawmakers in the state are attempting to close this loophole to make lending more fair to consumers, but until then, read you contract carefully before signing. It could save you hundreds of dollars in the long run.
A selection of loans you can consider in Ohio
Check the websites of any providers you’re interested in to confirm they operate in your state of residence.
How do I apply for a payday loan?
All payday lenders will require that you be at least 18 years old, have a regular source of income and be an American citizen or permanent resident of the US.
The application will usually have questions asking for your personal information like your Social Security number, employer, income and often your bank account numbers.
What are the alternatives to payday loans?
If you’re struggling between paying your debts and paying your everyday bills, you may want to look into assistance programs like Medicaid, the Emergency Food Assistance Program (TEFAP) or the Home Energy Assistance Program (HEAP).
Although payday lending is technically legal, lenders often take advantage of loopholes to avoid abiding by the laws that limit the interest they can charge. This means you need to be careful when taking out a loan and consider a payday loan only when you’ve exhausted your other options.