Most people know what a payday loan is. Payday loans, technically known as deferred presentment lending, involve a lender making an advance payment on a borrower's post-dated check. In return for cash, the borrower provides this check typically dated as of the date of the borrower's next paycheck. Most attorneys and consumer advocates warn against using payday loans because of the enormously high-interest rates and fees charged by payday lenders.
The repayment check includes the principal and interest, which constitutes the fee for the loan owed to the payday lender and permitted costs. The lender agrees to deposit this check on the date of the borrower's signed check.
Although legal in Florida, Florida state law, specifically Fla.Stat. § 560.402, strictly limits and regulates payday lending. Florida law places limits on the:
- loan amount;
- number of outstanding loans a borrower may have;
- length of the term of the loan;
- fees and costs charged for the loan; and
- lender's collection procedure options if the loan is not repaid.
Payday loans in Florida law require a written agreement signed by both parties on the date of the payday loan. A payday loan agreement must contain:
- the lender's name and address;
- the name of the employee who signed the agreement on behalf of the lender; and
- the amount, date, and term of the loan, and any applicable transaction identification number.
In Florida, payday loans may not exceed $500 with absolutely no exceptions. A borrower may only have one outstanding payday loan at any time and is subject to a 24-hour moratorium period for a new payday loan following repayment of a loan. To keep track of borrowers' loans, Florida uses a central database.
The repayment period for a payday loan may exceed 31 days or be less than 7 days. Florida law does not permit borrowers and lenders agreeing to rollover a loan. If a 14-day payday loan is obtained, a lender is not permitted to renew (rollover) the loan and charge new fees, for an additional 14 days, despite the fact that the total term of the loan would still be less than 31 days.Payday loans are rarely a good alternative. At Loan Lawyers, our South Florida consumer rights and debt defense attorneys help individuals with problems related to the payment of their debts and unscrupulous lenders. The experienced South Florida defense attorneys at Loan Lawyers are here to help you assess financial position and find a solution to your debt problems. To schedule a free consultation at any of our three conveniently located offices, contact Loan Lawyers today by calling (888) FIGHT-13 (344-4813).