Alaska Payday Loan Laws

Under the Alaskan statute, Licensee Practices and Recipient Rescission and Payment
AS 06.50.400 – AS 06.50.560, the following laws, rules, and regulations have been set for all licensed and registered payday loan service establishments.

• Maximum Loan Amount – $500 dollars
• Minimum Loan Term Limit – 14 days
• Maximum Annual Percentage Rate (APR) – 520 percent
• Loan Default Collections Actions Permitted: Non-criminal (exception for NSF checks)
• Total Number of Renewals: Two
• Maximum Quantity of Loans at One Time – opened, not to exceed $500 dollars
• Maximum Financing Rate – 15 percent or $15 dollars per $100 dollars
• Maximum Finance Fees Per Loan – $20 dollars
• Maximum Allowed NSF Fee – $30 dollars and no more than $700 dollars in court fees

In times of economic downturn and recession, individuals turn to payday loans to help them meet their financial needs. Unfortunately, there are unscrupulous payday lenders lying in wait for them. Alaskan lawmakers put the above regulations and laws in place to protect their residents. These predator lenders look for was to bypass current rules in order to feed their greed.

Some ways Alaska payday loan companies have found to get around the laws are by using shell companies in overseas countries and/or by having several lending sites in family member’s names. They do this in order to be able to split the loans. This means the consumer will have to pay several financing fees and interest fees. The payday lender will tell their client they only qualify for small $100 dollar loans instead of a $500 dollar loan. Then, the lender will send them to another location; unbeknownst to the borrower the same family owns it.

Another thing for borrowers to look out for in shady payday loan services is online only lenders. Many of these do not operate a brick and mortar location within Alaska so they are not subject to the payday loan laws. Customers using these lenders are in danger of being abused by unfair lending practices, such as APR greatly above usury levels, loan renewals loaded with high fees, and/or threatening collections tactics of a defaulted loan.

For anyone thinking about taking out a payday loans they should do their homework on the lending company. Potential borrowers should read the entire contract to be sure there are no hidden fees or surprises. Payday clients need to know the laws in their state and their rights under those laws. If they suspect a leader is not honest, they should not take the loan.

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