What does Maximum Loan Term mean?
Date: Tue, 07/03/2007 - 03:00
It says, for Washington State
- Maximum Loan Term: 45 days
- Maximum Loan Amount: $700
- Maximum Fee: 15% on the first $500 and 10% above $500
For Example:
- A loan for $500 + $75 fee = $575
- A loan for $700 + $95 fee = $795
How to interpret this law? What does 45 days of Maximum Loan Term mean. Can someone please explain me with this law?
a biggy thanks
Basically its the longest they can require you to pay back the l
Basically its the longest they can require you to pay back the loan. Kind of like when you get a car loan, you can get a year up to a 6 year loan.
does that mean?
Does that mean a PDL lender needs to allow you 45 days to pay the loan. I am still confused as they give it for 14 days only.
Why does Gov has to put a maximum limit, they should be putting a minimum limit. Thanks for the answer but I need a little more clarification.
The maximum loan term only means that the PDL can if they choose
The maximum loan term only means that the PDL can if they choose, to offer you a 45 day loan but they do not have to. Some states do have a minimum term also. So if the state allows a maximum of 45 days, they can offer the loan for any amount of days, up to 45 days. The state sets the guidelines on the loan amount and its up to the PDL to decide the loan terms within that framework.
In the PDL world the longer the term the better it is for the cu
In the PDL world the longer the term the better it is for the customer. All the state laws I have looked at set a maximum fee. In your example it was 15% on the first 500. The apr gets lower as the time gets longer. For example a 14 day loan would have an APR=391.07% which is the rate you would pay if you carried that loan all year. The calculation to get this is 15%/14 days * 365 days/year. If you had 45 days to pay the loan you would substitute 45 in for the 14 and the APR=121.66%. Just for the record both of those rates suck azz and PDLs are ridiculous but the 45 day loan is better. A credit card will give you an APR=21% or so which still sucks and a decent car loan or home loan is around APR=6%. I really do not know why the set a maximum length since they set a maximum fee. If you could borrow $500 for a year and only pay the $75 dollar interest fee then your APR=15% which is not bad at all really compared to credit cards.