Payday loans are quick cash that come with steep consequences, oftentimes the interest rate on payday loans can easily reach triple digits. However, for many individuals and families living paycheck-to-paycheck, it’s the only way to make ends meet. Tens of thousands living in Florida rely weekly on payday loans.
Payday loans are short-term and often paid off as soon as the borrower receives their next paycheck. But between the high interest rates and fees, this quick cash comes with a hefty price tag. Annual percentage rates can soar as high as 400%! This month the federal government is expected to impose national standards and limits on payday loans.
Consumer counselors agree that payday loan rules not only keep lenders in check, but protect people from getting in over their heads. In Florida, about 7% of the population relies on payday loans. That is one of the highest rates in the nation. There is also concern that if federal guidelines make the rules too strict, people who actually need the cash in a crisis – for example, to pay for a car repair or medical bill – may not be able to get it.
The question now is whether the new federal rules would strengthen, weaken, or leave in place what the state has already established.
Payday lending is limited in several ways in Florida. The law places limits on:
- the amount of the loan ($500);
- the number of loans you can have outstanding (only one at a time);
- the length of the loan term (cannot be for less than seven days or more than 31 days);
- the fees and costs that can be charged (interest is capped at 18%), and
- the collection process if you do not pay.
To learn more about Florida’s payday loan laws, click here.
If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.