Delaware Payday Loan Laws

Delaware is one of the most lenient when it comes to payday laws in their state. There are many aspects of these types of loans that are not mandated for consumer protection. However, there have been many legislative proposals for payday loan reform that have been voted down. Currently the laws and regulations stand at:

• Maximum Payday Loan Amount – $500 dollars
• Minimum Payday Loan Terms – 60 days
• Maximum Quantity of Outstanding Payday Loans – Unlimited, cannot exceed $1,000 dollar total
• Maximum Amount of Payday Loan Extensions – Four
• Maximum Payday Annual Percentage Rate (APR) – No set limit
• Maximum Payday Financing Interest Fees – No set limit
• Maximum Payday Annual Financing Interest Rates – Unspecified
• Maximum Allotted NSF Check Fees – Unspecified
• Maximum Allowed Criminal Actions – Unspecified

Although the payday lenders operating in Delaware do not have a real need to bypass the few laws governing their line of business, there are some that do anyway. Even though lenders can technically charge APR, fees, and financing interest on a daily basis if they choose, some greedy lenders want more. Therefore, they will make several small loans, many times around $250 dollars, in order to collect extra fees and charges from their customers. As long as the total the total amount of outstanding loans is below $1,000 the lenders are breaking no actual laws.

Having open ended interest rates is just not enough for some payday loan companies. They want everything to be open ended. So, they found that by doing business in another country where there are no limitations whatsoever, allows them to any amount large or small, they do not have to specify details clearly in the paperwork, and can let the client renew with even higher fees and interest charges. Delaware residents who deal with these lenders are open to even further abuse than state laws already allow.

One thing borrowers in Delaware need to be aware of is that some payday lenders require a postdated check for the amount of the loan to be given to them during the application process. The purpose for this is that if the customer defaults on the loan, the payday loan service company will deposit the check into their bean account automatically.

Now, the consumer not only has the loan, the fees, and the mounting interest, he or she is most likely going to have NSF charges tacked on as well. This is because if the person had the money in the bank to repay the loan, they would not have defaulted and the lenders know this. This practice is just another way to rake in more money from their financially strapped customers.

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