Loans.org Reveals Which State Has the Most Relaxed Payday Loan Laws

LOS ANGELES, May 16, 2012 /PRNewswire/ -- A recent report by the Idaho Press made the claim that Idaho is one of the most lenient states when it comes to payday loan laws. While Idaho's laws are extremely loose, allowing short term borrowing of up to $1,000 with no interest rate cap, Loans.org set out to find whether Idaho truly is the worst in the nation. They found that one other state was much worse.

Utah, best known for Bryce Canyon and Zion national parks, brings a new meaning to the word "relaxed" with their payday loan laws.

Failing to mention any borrowing limit, Utah law permits borrowers to take out payday loans of any amount, so long as lenders are willing to fulfill such requests. Theoretically, Utah borrowers can receive a limitless amount of money on a single two-week loan if they can find a willing lender. Compare that with California, which limits short-term financing to $300.

Source: http://www.dfi.utah.gov/PDFiles/Consumer%20Guide%20to%20Payday%20Lending%20in%20Utah.pdf

Furthermore, according to Utah's Department of Financial Institutions, there is no usury limit in Utah. This means lenders can charge whatever rate they deem necessary. In an industry where annual percentage rates (APRs) of 300 percent to 2,000 percent are not uncommon, this is a very dangerous piece of loan anatomy to leave unrestricted.

Finally, according to Paydayloaninfo.org, a branch of the Consumer Federation of America, there is no limitation on how many concurrent payday loans an individual may take out. Borrowers are free to hop around from lender to lender, taking these cash advances out from each one they pass.

Compare such an apathetic approach to the limits in most other states, which typically allow borrowers to have only one payday loan out at a time.

For more information on short-term lending issues, go to http://loans.org/payday to find a frequently updated library of financing information. Additionally, prospective loan applicants can access a free-to-use quote-comparison generator that is designed to help consumers receive the lowest interest rates possible.

To access the full story on Utah's relaxed laws, readers can follow the "Questions" link at the top of any page on the site.

SOURCE Loans.org, LLC

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