Online payday loans, and in-person payday loans, at the time of writing this article are legal in the following states: Alabama, Alaska, California, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, Wyoming.
Most states do allow payday lending, whether it’s online or in person. That being said, there are completely different payday lending laws in place from state to state. Some of these laws cap the amount that lenders can offer, other laws cap the interest rate that they can charge. It’s crucial that you’re familiar with the laws in your area before choosing to take out a payday loan.
Payday loans can be a risky financial choice. Not only do they tend to carry high APRs and interest rates, but they also usually have very short repayment periods. These short repayment periods can make it very difficult to repay your loan, fees, and interest by your agreed upon due date. And if you can’t repay on time, many payday lenders will offer to “rollover” your loan to a new term.
Loan rollover is when the lender gives you more time to repay your original loan. This may sound like a good thing but it will almost always accompany additional fees and interest. Rollover can often lead to a cycle of debt that’s difficult to escape. You can’t repay the loan, so you get a new loan term, but now you owe more money with the additional fees. And then paying it all back on the new due date is just as difficult, if not more so.
If you have other options outside of taking out a payday loan, it’s wise to explore them. Consider things like borrowing from a friend or family member, personal installment loans, or finding a credit union that will work with you.