Payday Loan companies are now prohibited from charging excessive interest rates to consumers.
Legislation, which went into effect on Jan. 1, 2009, will most likely put the payday loan industry out of business in New Hampshire. HB-267 limits the annual percentage rate on a payday and title loans to no more than 36 percent per year.
Payday loans are short term loans (usually a week or two) of $300 to $500, secured with a pay stub and paid back with a flat fee that translates to an annual interest rate in the hundreds. Title loans require the borrower’s car as collateral.
Lawmakers found that the rates of interest charged by many title loan lenders and payday lenders are unreasonable and predatory. Some Title loan lenders charge rates of up to 350%, and payday lenders were charging up to 1,000%.
Supporters said that payday lenders target vulnerable people and make it difficult for them to climb out of debt because the interest rates are so high that borrowers have to take out a second loan to pay off the first one.
The Act also prohibits lenders from giving payday or title loans to any borrower who has had such a loan in the previous 60 days.
For more information, contact Attorney Chris Ratté.
NOTICE: The information and articles posted on this website are for informational purposes only and are not intended as legal advice. Contact me to discuss your particular situation or consult a licensed attorney in your state.
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It’s unfortunate that this legislation will put these payday loan companies out of business. The fact that people need short term lending options is not going to stop because of this legislation. Who will they turn to when they need money fast?
No one wants to put them out of business. Most can’t afford to pay them back at 1,000% interest. I know. I have been struggling with one for a few months now. I have paid more than triple what I owe them. A cap needs to be in place.