Payday Loans in Ohio (OH),
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Are you in need of a short-term loan? Do you worry that you might be dragged into a cycle of debt by high and unrealistic interest rates from payday loans?
If your answer is yes, then you don’t need to worry anymore. The state of Ohio has your best interest at heart. In Ohio, lawmakers have passed bills to regulate payday loans and ensure that both the interests of the lender and borrower are adequately safeguarded.
You don’t have to risk putting yourself in more debt while trying to pay off the interest on a short-term loan. Also, you don’t have to borrow more money from payday loans to service your payday loan debts.
Short-term loans are a relatively common means of financial assistance utilized by people who need money urgently and don’t wish to go through the hassle of borrowing from a bank. Several payday lenders have extremely high interest rates, which may take years for a borrower to pay. However, with payday regulations, certain restrictions are put on payday loans to prevent the exploitation of customers.
Ohio Payday Loan Bill:
In 2018, legislators in Ohio passed laws to place some restrictions on payday loans. These restrictions serve mainly to reduce back-to-back loans and chronic debts. Some of the measures put in place to reform payday loans in Ohio include
- 28% Cap Rate: The loan act placed a 28% cap rate on all loans. This means that payday lenders cannot charge above 28% per annum as the interest rate for loans. This is a more realistic interest rate for most borrowers to pay and makes it easier for borrowers to be debt-free.
- Income-tests: Monthly payments cannot surpass 6% of a borrower’s income for loans that last for less than 90 days. The income test prevents borrowers from being exploited by lenders by ensuring that they still have 94% of their income left to cover other expenses and prevent further borrowing.
- Cost of the Loan: The cost of the loan refers to the fees and interests paid on the loan. The cost of the loan for payday loans in Ohio cannot be greater than 60% of the initial amount of the loan.
- Reasonable Amount of Time to Payback: Payday loans in Ohio must have a term of at least 91days. This makes it easier for you to be able to pay back what you owe. In addition to this, the term for a payday loan in Ohio cannot exceed a year.
Can You Change Your Mind About A Payday Loan?
Yes, you can change your mind about a payday loan. Payday loans in Ohio offer you the opportunity to return the money borrowed within three days and cancel the loan without having to pay any interest.
Is There A Maximum Amount I Can Borrow?
Yes, there is a maximum amount you can borrow. As per the new payday loan reform, you can take only one loan at a time from a particular lender. This means that even if you unable to pay back what you owe, you will not be allowed to borrow money from that specific lender until you have paid your debt. This also prevents you from stacking debts.
Furthermore, you can borrow just 1000 dollars from a particular lender. However, you are not allowed to borrow more than $2500 at any point. This means is that the amount of money you borrow from different payday lenders should not exceed $2500 when added.
Why You Should Go For a Payday Loan in Ohio
Payday Loans in some states are not regulated and can be high-risk for both lenders and borrowers. Regulation of payday loans in Ohio mitigates the risks involved in loans.
The provision of a three-day window for customers to cancel loans makes payday loans in Ohio more flexible. It ensures that borrowers don’t make rash decisions in their desperation.
You don’t need collateral for payday loans in Ohio. You also don’t run the risk of losing an asset if you encounter any difficulty while trying to pay back a loan.
Payday loans in Ohio don’t charge outrageous interest rates on loans. In some states, the interest rate of some loans is as much as 200% per annum. The cap rate for interests in Ohio is around 28%.
Borrowers who use payday loans in Ohio don’t run the risk of servicing debt with a considerable percentage of their monthly income. Payday loans cannot take more than 6% of your gross monthly income. This affords you the ability to use 94% of your gross monthly income to cover other necessary expenses.
Do You Need A Credit Score For Payday Loans in Ohio?
If you have a credit score that is not exactly satisfactory, I have good news for you. While most financial establishments might need your credit score before giving you a loan, you don’t need a credit score for payday loans in Ohio. As with most payday lenders, payday lenders in Ohio are not interested in your credit score. Therefore, even if you don’t have a good credit score, you are still eligible for a loan.
Criteria to Get a Payday Loan in Ohio
Although getting Payday loans in Ohio is rather easy, you still have to meet some requirements. Payday loan requirements are very straightforward and don’t stall the time taken to acquire a Payday loan once they are met. The criteria for a Payday loan in Ohio are as follows:
- You must be at least 18 years old.
- You should have a valid checking account.
- You should be a legal resident of Ohio. You can prove this by providing your contact address.
- You must provide proof of a stable income. This ensures that you can pay back your loan.
- You need a phone number or a valid email address for instant approval.
- You must sign a declaration that you don’t have over $2500 in short-term loans.
Summary: Why Payday Loans?
Payday loans are a quick way to get yourself out of a financial fix. The Payday loan system in Ohio has been regulated to reduce the exploitation of borrowers and save a lot of money for the state. The criteria for access to Payday loans in Ohio are easy to meet.
While taking Payday loans, you should pay attention to the rules that govern them to avoid entering a debt cycle.
Amanda is a senior financial copywriter at AdvanceSOS. She has more than six years of journalism experience, mostly in finance. She graduated with a Master’s degree in finance from the University of Oklahoma.