It’s easy to misstep and end up in a sticky financial situation. Whether it’s a car repair, an emergency bill or just needing help getting to the next paycheck, a short-term loan, also known as a payday loan, may be a viable option.
Are payday loans legal in Alaska?
Payday loans are legal in Alaska.
Alaska statute 06.50.010 et seq. presides over the functioning of all payday lenders. Lenders that provide short-term loans must have a valid business license and are required to have individual licenses for every physical location or website they use to conduct business.
Here are some quick facts about payday loans in Alaska:
- Maximum loan amount: $500
- Minimum loan term: 14 days
- Maximum loan term: None
- Maximum APR: 520% for a 14-day $100 loan
- Rollovers: Borrowers are permitted 2 rollover/refinancing periods per loan.
- Loan limit: There is no limit on the amount of loans you can have at once.
Alaska law gives you the right to cancel a loan at any time before the close of the next business day.
What are the costs of a payday loan in Alaksa?
Here’s what you can expect to be charged on your loan:
- Finance rate: The maximum finance charge for a 14-day $100 loan is limited to $20.
- Origination fee: Lenders may charge a $5 origination fee. Lenders may also charge a fee of $15 per $100 or 15% of the advanced amount, whichever is smaller.
- Rollover fees. Lenders may charge a new origination and financing fees per rollover.
- Non-sufficient funds fees: If you don’t have enough money in your account to make a payment, a lender may charge a $30 fee.
- Collection fees: You may be required to pay court costs of up to $700, provided the lender discloses this in the loan agreement.
Should I get a payday loan in Alaska?
There are various reasons that residents of this state seek short-term loans, which include:
- Easy to apply. You can apply for an Alaska cash advance from practically anywhere, provided you have access to an Internet-enabled computer. You can find short-term lenders that let you complete the identity verification process online, in which case you don’t have to fax any documents over. If you live near a short-term lender’s store, you could pick up your cash for an even faster turnaround.
- Bad credit is alright. Payday lenders tend to pay attention to other factors than your credit score and put your monthly income first.
Put simply, if you’ve had trouble being approved for a traditional loan in the past because of bad credit or long eligibility criteria, a short-term loan could be for you. Before you apply, read on to learn about important considerations first.
Important considerations before taking out a loan
It’s impossible to predict a financial emergency. If you have bad credit, it can be hard to find quick money. Although payday loans are known for their high interest rates, they can be an easy way to make it between checks when a crisis hits. Keep in mind, though, that people often find themselves stuck in a spiral of debt. To avoid this, only borrow what you need and be sure to understand how much the total loan will cost by reading about the fees charged below.
Alaska has some temporary assistance programs that can help you afford your bills while you work on paying down your debt. Look into the Alaska Temporary Assistance Program (ATAP), Heating Assistance Program (HAP), Food Stamp Program and the General Relief Assistance (GRA) program if you’re not sure where to start.
Before you borrow, consider alternatives to a payday loan
How can I apply for a payday loan in Alaska?
Although every lender has different criteria it considers when determining your eligibility, you should meet the following before applying:
- You are at least 18 years old
- You are a US citizen or a permanent resident
- You have a regular source of income
You’ll also need to provide some personal information, such as your Social Security number and your bank account details. This is why it’s important to compare your loans before and vet lenders before you apply.
If you’re considering taking out a payday loan, do your research. Our page on payday loans will teach you everything you need to know about the process.
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