Are you curious about how payday loans work in Utah? Let’s go over Utah payday loan laws to help you better understand how it works.
Payday loans have been around since the 1990’s and they are still available today. Financial institutions like Check City offer payday loans to help customers get the money they need from their next paycheck sooner.
Keep reading to learn more about how Utah payday loan laws work so you can better understand this type of loan, what it is, and how it works.
Payday Lending is Available in Utah
Payday lending is legal in Utah. So if you’re a Utah resident, this short-term loan option is available to you.
Payday loans are a type of short-term loan that gives borrowers money from their next paycheck now. They can be a smaller loan option for when you need fast funds for emergency expenses.
Utah Payday Loan Laws
Each state might have different laws and regulations for payday loans, so it’s important to know what the laws are in your state. Lenders in Utah might have different loan terms, but as state licensed lenders they all need to follow these same Utah loan laws.
What is the Maximum Loan Amount in Utah?
There is no maximum payday loan amount in Utah regulations. But your specific lender might have their own maximum loan amounts they offer.
For example, at Check City loan amounts and limits are determined on an individual basis and depend on your income and other factors. This helps to make sure customers borrow what they can afford.
What is the Maximum Loan Term for a Payday Loan in Utah?
The maximum loan term in Utah is 10 weeks or 70 days. This will also factor into your loan agreement and any scheduled payments.
What are the Rates, Fees, and Other Charge Limits in Utah?
Loans can come with rates, fees, and other charges and sometimes the state will have regulations or limits on these charges. A Utah payday loan could potentially have finance charges like interest, an origination fee, or a non-sufficient funds (NSF) fee. Read your loan agreement carefully to understand any finance charges that might apply to your loan.
Payday Loan History in Utah
Payday loans have been available in Utah for many years. Over time they have undergone some changes. Today, payday loans in Utah are a type of short-term loan that helps borrowers get the money they need between paychecks.
Early 1990’s: Paydays loans first started appearing as a loan option.
1999: Check Cashing Registration Act passed, registering and regulating check cashing businesses and payday lenders.
2003: Checking Cashing Registration Act amended, giving borrowers the right to cancel a payday loan up until the day after they sign their loan agreement. It also allowed borrwers to make partial payments without penalties and added more disclosure requirements for lenders.
2008: Checking Cashing Registration Act renamed to the Check Cashing and Deferred Deposit Lending Registration Act and changed to keep lenders from being allowed to offer loans to customers who have made a recent loan payment on a loan that was at least 12 weeks old.
2010: Legislation changed loan rollover timeframes from 12 to 10 weeks and created extended payment plans.
2012: Legislation voided any loans that were distributed by unlicensed payday lenders.
2016: Regulation changes that required lenders to look at credit reports and report loan information to consumer reporting agencies.
2017: Legislation updated loan extension rules again.
Is a Payday Loan Right for you?
Payday loans are not meant to be a long-term financial solution. They are meant for short-term financial needs when you need a little financial help between paydays. Credit counseling is your best option if you find yourself really struggling financially.
But when you have an emergency expense, a sudden expense, or need a little financial help between paydays to avoid late fees or overdraft penalties, then a payday loan could potentially help.
Benefits of a Payday Loan
There are several reasons people choose to get a payday loan. For example, if your car breaks down and you need to pay for repairs, but rent is also due. You might not have the budget to do both of those necessary expenses at the same time and a short-term loan could help you bridge that financial gap.
Here are a few other payday loan benefits:
- Fast funding
- Get cash or direct deposit
- Bridge the gap between paydays
- Avoid late fees
- Avoid overdraft fees
- Avoid over-the-limit fees
- Ensure important payments are made on time
- Provides an advance on funds from your next paycheck
Things to Look for in a Payday Loan Lender
Utah payday loan laws are there to protect borrowers and make sure they are well informed on loans and how they work. Potential borrowers want to look for payday loan lenders that are licensed in the state of Utah and clearly follow all regulations and guidelines.
Here are some key things to look for in a payday loan lender:
- Affiliated with organizations like INFiN, a financial services alliance with a mission to be the voice for the consumer financial services industry and advocate for loan customers.
- A State Licensed Lender. You want your payday loans to come from reputable lenders that are licensed with the state they operate in.
- A Direct Lender. You want to take out loans with direct lenders rather than indirect lenders. Direct lenders will work with you directly to approve and supply the money you need rather than sending your information to different lenders.
- Commitment to Responsible Lending. You want to choose a lender with a commitment to responsible lending practices who adheres to state regulations.
- Great Customer Reviews. Check out the lender’s customer reviews for first-hand experiences with using their services.
- Clear Disclosures, Terms, and Conditions. Always read any disclosures, terms, and conditions the lender provides for a better idea of how they operate and how your loan agreement works.
- Community Involvement. Companies that care get involved in their communities because they care about supporting their communities in more ways than one. When you see a lender that is actively involved in helping their community thrive, then you know you have a company that is here to stay and do things well.
State Licensed Payday Lenders
What does it mean to be a state licensed payday lender? This means that the lender is licensed with the state they operate in and follow all of the necessary regulations set by the state.
If a customer gets a payday loan from a non-licensed or overseas lender who does not abide by state and federal lending laws, the borrower will be without important consumer safeguards.
If a lender is not willing to abide by state and federal lending laws, what else might they not be willing to abide by? Borrowers should not take this chance and should choose licensed lenders over non-licensed lenders.