When you have unplanned expenses and are on a tight budget, a payday loan could be helpful. Payday loans, a type of short-term loan, give you quick access to money when you need it. Read on to find out about the laws in Missouri and everything else you should know about how payday advances work.
Payday loans can help you quickly get money to cover an emergency expense or late bill. If you live in Missouri and are considering borrowing a payday loan, this guide will help you learn the ins and outs of the laws lenders must abide by.
How to payday loans in Missouri work?
Payday loans are governed by Missouri Revised Statutes §§ 408.500.1 et seq. All lenders must be licensed by the Missouri Division of Finance, and the law requires Missouri payday loan providers to provide borrowers with all the relevant information prior to disbursing the loan.
- Maximum loan amount: $500
- Maximum loan term: 31 days
- Minimum loan term: 14 days
- APR: The APR on a 14-day $100 is 1950%
You have the right to cancel your loan before the end of the following business day.
How much will a payday loan in Missouri cost?
Missouri payday loans are high-cost forms of credit. Here are the possible fees a lender may charge when you borrow.
- Financing fees: 75% of the initial loan amount–this includes all interest and other fees
- Collection fees: Lenders may charge a reasonable non-sufficient funds (NSF) fee if you fail to repay
- Default charges: Court costs and reasonable attorney fees
Want to apply for a payday loan in Missouri?
Whether you apply online or in-store, you should be at least 18 years old, be an American citizen or permanent resident and have a regular source of income.
Lenders usually require you to supply some personal information in order to confirm your identity and disburse your loan. This includes your Social Security number and details from a valid form of ID. You’ll also have to discuss your monthly income and some details about your employment, and if you’re applying online, lenders will request access to your personal checking account.
What should I consider before getting a payday loan?
If you’re having trouble paying bills, you might want to consider applying for federal or state food stamp programs and the Low Income Home Energy Assistance Program (LIHEAP) if you have trouble heating your home during the fall and winter.
Other options you might want to consider are
- Consolidate your debt. If you have multiple loans taken out and are struggling to pay them down because of high interest payments, taking out a larger personal loan to cover it can help you budget and lower your interest.
- Consider a credit card cash advance. If you have a credit card, you can cash out the remaining balance on your line of credit. These have high interest but longer terms than a payday loan so you have more time to pay back what you borrow.
- Ask your family and friends. Your loved ones may be willing to help you with an emergency bill if you ask. Remember that this is still a loan and you should pay it back as quickly as you can to avoid hurt feelings.
If you need money, a payday loan might seem like a good option. They can cover an emergency or a large bill, but the laws in Missouri are quite lax. You’ll want to read the entire loan contract before you accept a loan to avoid having to pay extra fees should you miss a payment.
Frequently asked questions
Can I take out more than one loan at the same time?
You can borrow $500 from any one lender at a time.
What is the maximum number of rollovers I can get?
You can roll over your loan six times provided you reduce the principal amount by at least 5% upon each renewal.
Is there a cooling off period before I can apply for another payday loan?
Missouri law doesn’t require you to take out a payday loan, but it’s a good idea to take a break between payday loans to avoid taking on extra debt.
What happens if I cannot repay my loan on time?
There are no repayment or installment plan options available in Missouri. While the lender cannot pursue criminal action against you, if you default on your loan repayment, you will be responsible for paying back the full amount of the loan, all interest and fees, plus collection fees, including reasonable attorney’s fees and court costs.
How can I make a complaint?
If you have a complaint about a payday lender or want to report an irregularity, get in touch with the Missouri Division of Finance.
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