Minnesota Payday Loan Laws

The state of Minnesota does everything in its power to protect its citizens from payday loan debacles. They do have strict laws in place that protect borrowers both online and in-person. Minnesota does have clear boundaries set in place when it comes to these payday loans, according to Minnesota Small Loans – chapter 47.60.

• The maximum APR can reach 390%
• The maximum interest rate or finance fee for a $100 loan is 15% plus a $5 fee
• The maximum interest rate for large loans is 33% plus up to $25 in fees
• A loan may not exceed a 30 day term
• The minimum loan term is 14 days
• A loan cannot exceed $350

While there is no mention of the number of rollovers/extensions that a borrower can have, they are dangerous for a consumer to consider. This will tack on additional fees which can put the borrower further into debt. There is also no mention of how many loans a borrower can have at one time.

Payday lenders are subject to the rules and regulations set forth by TILA, the federal Truth in Lending Act. It is, however, completely up to the state itself to set laws and strict regulations regarding payday lenders. The federal guidelines can only do so much in this case.

Borrowers must be given a copy of the terms that include a detailed outline of the fees and penalties imposed when obtaining the loan. The APR must be present in this statement as well as the fee schedule and payment schedule. These are regulations set forth by TILA. If a lender fails to provide this information to a borrower, the borrower may then file a petition with the state for improper payday loan practices. The borrower may actually be entitled to monetary damages.

The Minnesota Consumer Small Loan Act prevents a borrower from applying one loan to pay another. The lender facility has to be an approved institution that is registered with the Minnesota Commissioner of Commerce Department. Each institution must adhere to the maximum percentage rates and fees set forth by the state.

Consumers are only protected in so many ways. It is hard to protect them when using an online source. Any online payday loan provider has to abide by the statutes of the state that their customer lives in. Few actually do this. It is honestly best to steer completely clear of using an online payday loan source.

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