Cash Advance Loans
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Flourishing payday lending business in Missouri

Generally, payday loans are designated for those situations when urgent money is needed immediately. These loans can be determined as cash advance credit given to a customer in return for his further paycheck under a set interest rate. Missouri is the State with the most favorable legislation regarding payday lending business in America. The laws that are currently in force were adopted in 2002. They let many lending companies prosper. Over 1,200 payday lending institutions are operating on the Missouri market today. This number doesn’t include those lenders that offer their services online. There also the softest laws concerning interest rates for payday loans in Missouri.
Payday lenders are required to get a license for their operations in order to be engaged in the lending business. The Missouri Division of Finance is the body responsible for issuing such licenses. The license should be displayed prominently and provide all the data about payday lending company and its services together with contact details of the Financial Division.
Some amendments to the State legislation were introduced in 2006. According to them the maximum amount of the allowed payday loan makes up $500. A borrower is able to take only one loan at a time. A payday lender is allowed to charge his client financial charges and interest rates. The provided period of payday lending is ranging from 14 to 31 days. The percentage rate up to 75% is allowed to be charged for one payday loan. Every loan’s renewal is accompanied with the same rate. As we can see, Missouri is the State where the highest annual interest rates are allowed. Sometimes, the rate reaches the level of 2,000%. Moreover, five or six extensions of the loan are legal.
In accordance with the Missouri law, a payday lender is required to give a borrower the contract’s copy which includes all the details about payday lending bargain. The contract should also include all terms and conditions of the loan. Before submitting a contract a borrower is to read it attentively. If it is necessary a transaction can be annulled by a borrower till the end of next day.
A payday lending firm is to acquaint its customers with the data about annual percentage rate, financial fees and terms of the loan. Additionally, a lending company is required to keep records of all the lending transactions within two years. If a payday lender has decided to stop the activities of the company, he should inform the Missouri Division of Finance about it in 10 days before leaving off. Furthermore, he is required to give explanation to this decision, return the license, and pay back all his debts.
Payday lenders of Missouri are prohibited to criminally prosecute their borrowers, except for the cases when a borrower stopped paying or closed his account before repaying the loan. Lenders are allowed to make collections, if a customer has non-sufficient funds. However, it is forbidden to conduct these collections through Automated Clearing Houses. Moreover, the borrower’s personal information should be privately kept by a lender and shouldn’t be disclosed to other companies. Before concluding a contract, a borrower is better to examine the annul interest rate established by a lender in order not to be shocked by it later.