Kansas Payday Loan Laws

The state of Kansas put into law the following payday loan regulations for all lenders to adhere to while operating within the state. They can be found in Kan. Stat. Ann. § 16a-2-404 and are listed below.

• Maximum Payday Loan Amount – $500 dollars
• Minimum Payday Loan Terms – Seven days
• Maximum Payday Loan Terms – 30 days
• Maximum Quantity of Outstanding Payday Loans – Two
• Maximum Amount of Payday Loan Extensions – Unspecified
• Maximum Payday Annual Percentage Rate (APR) – 390 percent
• Maximum Payday Financing Interest Fees – $15.00 dollars
• Maximum Payday Annual Financing Interest Rates – 15 percent
• Maximum Allotted NSF Check Fees – Amount Unspecified, but only one fee allowed
• Maximum Allowed Criminal Actions – None

These regulations are the state’s attempt to protect their citizens for the notoriously high interest and abusive payday loans. Unfortunately, they only work when they lenders are following the laws. Many unscrupulous lenders have found ways to bypass the laws. The loopholes can include, operating online from foreign soil to taking advantage of American-Indians and using their sovereign lands.

Most Americans are familiar enough with payday loans to know their ARP and fees are high. However, the lenders operating outside Kansas payday laws will charge from 1,000 to as much as 3,000 percent ARP on a single loan. This may sound impossible for the payday leaning company to get away with, but they do. This is because they are not breaking the laws if they are not subject to them. Therefore, they are willing to go to any length to fill their greed, even bribing the poorest tribes to use their lands to run their payday loan company.

Some lenders utilize other loopholes in order to rake in more money from those in need. For example, some payday lending services simple say they are not payday lenders, but offer open-ended credit lines. Another tactic is to say they only guarantee or broker loans for their clients. This way the lenders do not have to adhere to the state’s payday laws and do not have to uproot either, in order to collect large fees.

Kansas residents can further protect themselves for these dishonest payday lenders by becoming informed of state laws and regulations. If a lender is offering a deal outside of the norm, chances are they are utilizing a loophole, which always proved costly for the consumer. No one wants to have to take out a payday loan, so he or she should be sure it is legitimate and within Kansas’s laws.

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