Legal steps for Top 5 payday loan problems in Alabama
Debt Consolidation Care Community Members have summarized the Alabama Code for payday loan (Title 5, Chapter 18A) to help AL members get out of payday loan traps. Members of this community have helped many to get their payday loans marked as paid in full. Read the Success Stories to know how to deal with the payday loan companies.
Top 5 Queries asked by AL payday loan consumers.
- Query 1: My payday loan company is charging excessive fees.
- Query 2: I have defaulted over payday loans.
- Query 3: Check returned to the lender due to NSF/Closed account, what's next?
- Query 4: How many extensions/roll overs are allowed in AL?
- Query 5: How to find out if my lender licensed in AL or not?
Query 1: My payday loan company is charging excessive fees.
What law says:
A licensed lender can offer maximum $ 500 to one consumer at once and cannot charge or collect fees more than 17.5% of the amount offered.
What Community says:
You can draft a letter for your lender stating what your state laws permit. If you have already paid more than what your state allows, you can request your lender to mark your account as "paid in full". Letter writing help
Query 2: I have defaulted over payday loans.
If, after 1 roll over, the consumer cannot repay the loan amount; lender should offer a payment plan with 4 equal installments to get the loan amount back. The lender cannot take any legal action against a defaulter unless the consumer is notified about his/her rights in written. Failure to act within 15 days of receiving the notice on the consumer's part gives the lender start collection activities.
Query 3: Check returned to the lender due to NSF/Closed account, what's next?
Lender can charge fees mentioned within the Chapter for "Bad check charge", which says, lender can charge the greater amount of either $ 30 or equal to the amount charged by the respective financial institution.
State Banking Department regulates Deferred Presentment Services through Bureau of Loans. Any queries or complaints should be forwarded to the State of Alabama - Banking Department, Bureau of Loans.
Query 4: How many extensions/roll overs are allowed in AL?
Alabama permits only 1 extension/roll over at the same rates as mentioned above. Once a lender has 2 transactions with a customer, the next presentment (a new loan or extension) can only be offered on the next business day after the present loan is paid in full.
Query 5: How to find out if my lender licensed in AL or not?
According to the "Deferred Presentment Services Act" of the state of Alabama, license is a must to offer Deferred Presentment Service (legal term of Payday Loan, Cash Advance) in the state.
Check the list of licensed lenders with the State of Alabama - Banking Department, Bureau of Loans.
Visit the home page for Alabama members for more debt and credit related information.
