Are online payday loans legal in Kansas?
The affordable way of life in Kansas is one of its appeals. Although it’s true that you’ll pay a little less in this state for groceries, transportation, and other items, some citizens still face hardship. For the typical Kansas resident, it is not practical to make top cash in a state that is mostly recognized for farming. Payday loans are one way some Kansas residents help them through a month where money may be tight.
Here are some specifics on how Kansas payday loans online operate as well as advice for those who are thinking about applying.
Kansas Payday Loan Regulations
Katie Raines, the financial adviser, warns people in Kansas who are considering getting a payday loan to study of all the laws and guidelines that apply to this sector of the economy. In 1993, legislation was approved in Kansas to start regulating the payday loan industry. The rules were changed in 2004. Nowadays authorities are thinking about imposing new regulations on the sector. What you need to know is as follows:
- Maximum payday loan amount: $500
- Loan term: seven to thirty days
- No rollovers are permitted
- Finance charges & fees: 15% of check
- $15 finance fee for a $100 loan with a 14-day term
- APR on a $100 loan for 14 days is 390%
- The most loans that can be taken out at once is two
Over the years, there have been numerous legislative attempts to regulate the payday loan market in Kansas, but most of them have been unsuccessful. The classic kind of payday lending is still permissible in Kansas under the current state regulations. On loans as brief as seven days, lenders may charge interest rates high into the triple digits.
Kansas’s payday loan regulations: How do they fare?
One of the roughly thirty states that still permits the payday loan industry to operate mostly unregulated inside its boundaries is Kansas. Only about a third of the United States has effective payday lending limitations.
Payday lenders have a well-deserved reputation for fighting back against attempts to regulate them. They generate a substantial amount of revenue from their operations, and they aren’t shy about using it to advocate for their cause. One state where attempts to limit the industry have been successful is Kansas.
Kansas rates, fees, and other charge limits
Payday lenders in Kansas are only permitted to charge finance fees that are no more than 15% of the total loan amount. That is not the same as a 15% interest rate. 15% of the debt on a $500 loan is $75. Depending on the length of the repayment period, that can result in an APR ranging from 183% to 782%. It’s around 391% for a regular two-week payday loan.
Fortunately, lenders are only allowed to impose this one tax over the base finance rate. Only two situations are an exception. First, for payday loan KS backed by post-dated checks, a single returned funds fee of up to $30 is permitted. In general, lenders must inform borrowers of this fee and obtain their consent prior to the transaction.
Why use a payday loan?
Payday loan borrowers can be living paycheck to paycheck. If they can’t pay their costs on time one month, workers from all different businesses in Kansas may think about using a payday loan. Persons with lower incomes, including blue-collar workers, retail personnel, and service industry workers, more frequently take out payday loans.
Kansas has a low cost of living, yet the cost of basic necessities and other expensive items keeps going up. Being on a tight budget can make setbacks like an expensive car repair bill or an unexpected house expense. One can manage with the aid of payday loans.
The Bottom Line
Kansas residents, in order to address their financial emergencies, are encouraged to apply for loan products. Discover the services to connect with hundreds of Kansas direct lenders if you live in Kansas and require money right away. According to Kan. Stat. Ann. 16a-2-404, 405, short-term loans up to $500 are permitted in Kansas. If you require extra money, you can apply for personal loans with durations of up to 36 months that range from $5,000 to $15,000 and $1,000 to $5,000 for installment loans. The maximum APR is limited to 390%. For each $100 lent over the course of 14 days, a $15 financing fee applies.