Under Florida state law, borrowers are given a 60-day grace period if they are unable to repay a payday loan on the date of scheduled repayment. To qualify for this grace period, borrowers must: (1) make an appointment with a credit counseling agency within seven days of the loan’s original due date, and (2) complete the credit counseling within the 60-day grace period. Borrowers may repay the loan without additional fees or costs pursuant to any repayment plan recommended by the credit counseling agency.
Florida limits the fee that payday lenders may charge for a payday loan to 10% of the principal amount of the loan. Costs such as verification fees are limited to five dollars per loan. The payday lender charges an interest rate that is the rate for the specific loan term rather than an annual interest rate.
If a payday loan is not repaid, i.e., the repayment check provided by the borrower to the payday lender fails to clear, the lender’s recourse in this situation is limited by Florida law. A payday lender may not pursue criminal action against a borrower for passing a bad check. A lender may demand payment but is limited to the original 10% fee and $5 cost, in addition to bad check fees charged by the lender’s bank.
Payday lenders may proceed with a civil action against a borrower but the lender is limited to Florida’s rate of interest (4.75%) on judgments rather than a rate based on the payday loan’s fee (10%).
This agreement may not contain terms whereby the borrower agrees to hold the lender harmless for any damages or actions, waives any rights under the law, agrees in advance to the entry of a judgment or wage garnishment, or waives any defenses to repayment.
A lender may provide a loan’s proceeds in a form other than cash only upon agreement of the borrower. The loan’s fees may not be collected in advance, and the lender may not demand any additional security or guarantees. The lender must also provide a copy of the signed payday loan agreement to the borrower at the time of the loan transaction.
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