- Amount Allowed to Borrow: No limitation, however lenders will have limits that are specific to their own business
- Origination Fees / Interest Charged: No usury limit in Utah, which means no limits on what the companies can charge
- Bounced Check Fees Allowed: Lenders have the right to charge a minimum $20 bounced check fee
- Maximum Interest Rate: No maximum
- Maximum Monthly Fee: No Maximum
- Extensions/Roll-overs: Roll-overs and extensions are allowed, but not beyond 10 weeks from the initial loan date.
What This Means For You, as a Borrower:
There are three key takeaways from Utah payday loan laws:
- You will have access to as much money as you qualify for (typically the most is going to be around or less than $1,500)
- You will have access to more lenders than you would if the state were more restricted (I speculate that even some start-ups such as ZestCash.com started in Utah because they had less red-tape and regulations to deal with)
- YOU WILL HAVE TO BE MORE RESPONSIBLE WHEN TAKING OUT A PAYDAY LOAN IN UTAH – without the state holding your hand, you are more at risk to fall into the debt trap.
What You Need To Do as a Borrower in Utah:
Frankly, this applies to anyone borrowing anything in any state. However, because of the increased freedom given to you in the State of Utah regarding payday loans you will need to be a little more disciplined than you might otherwise be. The main issue you might have is not with fees – fees in other states are going to be basically the same as in the Utah, as most lenders have adopted what they call ‘Best Practices’ in the industry. However, you do need to worry about how long before you pay back the loan and the amount you borrow. Follow the following guidelines:
- Make sure you only take out the minimum that you need to get by. Payday loans are only meant as SHORT-TERM funding options for emergencies or to pay off other, higher-interest finance charges (late fees, overdraft charges, etc.) – only use them this way.
- Pay off the loan on time. Paying $45 to borrow $300 isn’t that bad. However, if you end up rolling over the loan for 10 weeks and paying bounced check fees, then that $45 can turn into more than the initial loan amount borrowed.
- Make sure your Utah payday loan lender adheres to the industries ‘Best Practices Guidelines’, and that they are legitimate lenders. I would personally stay away from the smaller pawn-shops and mom-and-pop lenders and go with the bigger chains that follow those guidelines.
Resources:
- To learn more about payday loan Utah industry practices: http://cfsaa.com/
- Utah Department of Financial Institutions: (801) 538-8830
- Utah Consumer Lending Association: (801) 328-1888