Cash Advance Loans
First Name:
Last Name:
Email:

Payday lending industry and its regulation in Montana

The State law under the name Stat. 31-1-701 et seq. allows payday lending industry in Montana.

There is a huge demand on payday loans in Montana despite the fact that these loans are very expensive. Although interest rates that consist of 3-digit numbers are not prohibited here, the legislation of Montana is more favorable for borrowers than legislation of other States. The State authorities impose some limitations on the local payday lenders, which enable them to control the activities of these companies. Such regulations are adopted in order to protect Montana citizens from dealing with unfair lending firms.

A payday lender is allowed to provide a loan not exceeding $300. A borrower, in turn, is able to take not more than two payday loans from the same lender at a time.

The annual percentage rate for a loan which is given for a fortnight and amounts $100 is 650%. As it can be seen, this rate is rather high, so that payday lenders are restricted to charge their clients with extra interest rates. On the other hand, they are allowed to charge additional financial fee of $25 for a loan making up $100.

A payday loan is to be repaid in a period not exceeding 30 days. Any extensions, rollovers, refinance, or renewals are prohibited by the State law. A borrower is also forbidden to take a further loan with the aim to pay back the old one. In addition, a lender can’t charge any interest rate for this service.

What concerns collections in Montana, payday lending companies have a legal right to require paying one non-sufficient funds fee from a borrower. The maximum sum of this fee is $30. A moderate attorney fee is also allowed.

The Montana legislation is rather soft to the borrowers who have defaulted on the loan repayment. No criminal actions against these lenders are allowed. In accordance with the State legislative acts debts on payday loans and inability to pay off the loans are ranked to civil offences and are not penalized with imprisonment. In case a customer finds out that he isn’t able to repay the loan on time, he should inform a payday lender about it beforehand. For example, if a borrower decides to close his account and cease repayment for some time, he doesn’t need to receive permission from a lender, a notification will be enough in this case. Sometimes borrowers are threatened by their payday lenders with criminal suits and similar prosecutions. In these situations lenders are most likely to be fake and not operate in accordance with the legislation. That’s why it is highly recommended for payday borrowers to study the law before applying for payday loans and act reasonably.

If there is a necessity, payday lenders are able to either provide a borrower with a repayment plan or accept the one offered by a borrower. All they are interested in is to return their money. So, in case a customer has borrowed a payday loan, but can’t pay it off on the due date, he should not worry, examine the State legislation and discuss all the issues with his lender wisely.