Installment Loans Massachusetts
Massachusetts Installment Loans are cash advances taken especially when in need of quick cash. Due to their short term nature, they come at a relatively high cost sometimes exceeding the amount borrowed.
The borrower gives the lender the authority to automatically debit their account in order for a consumer to be given a Massachusetts installment loan in a legitimate and lawful fashion.
The state of Massachusetts decided to protect its residents by banning Massachusetts Installment Loans.
Aside from the high cost of the loan, these lending companies will have access to your personal information such as bank account details.
Some being Internet-based companies make it even more difficult to track them down and thus put the consumer at risk since some operate under different names while using multiple domains.
It puts the consumer at risk of identity theft.
According to the Small loan act, it is illegal to run payday lending services in this particular state and any defaulters will be charged. Cash checkers are prohibited from giving out loans unless they are licensed under the act’s regulations (small loan act. 209 Mass. Code Regs. 45:14(8)).
The local banks are banned from working with any payday lending companies operating outside the state of Massachusetts. This law banning the operation of such lending companies came into effect on 1st January 2011.
All lending institutions (online lending companies included) are required to operate under the aforementioned regulations in the Small loan act. The act further stipulates that fees charged by lenders operating the under the act must not exceed 23% of the total amount of the loan.
Parties interested in offering small lending services in this state must obtain a small loan license from the Division of Banks (businesses providing loans not exceeding $6000 at an interest more than 12% should get a license under the laws regulating this practice).
In the definition of its authority in handling this, the Division of Banks states a payday transaction occurs where a consumer applies for it and not where the payday institution is located.
In addition, the lenders must not charge more than 20 dollars either as any finance charge or as an administrative fee. This law requires that employees be paid weekly or once in every two weeks to enable them to avoid the temptation of opting for such practices.
There are other alternatives to exploit instead of opting for such a costly short term alternative.
For example, a consumer can contact one of their local banks or credit unions which provides a short time loan. Even though there are charges that will be involved in securing such a loan, they are safer and cheaper than what you would otherwise pay for getting Installment Loans. In addition, the consumer has the opportunity to interact with the agents of the company if they have concerns or questions.
Another option is to obtain a cash advance from your credit card even though it is quite expensive but still cheaper than a payday loan. Asking for an advance from your employer is something that you can also consider when in need of quick cash.
Other options the consumer could pursue include finding out if they could delay paying a bill with no interests and thus arrange with that company on how they will clear out the due payment.
The consumer can also ask the creditor to extend the period to pay the bills or a modification of the terms and what charge will be given for such an undertaking, for example, an increase in the interest rate or a fixed late charge.
The consumer may also look for a credit consultant for advice on how they can get out of debt without applying for any of the short term loans.
Some of the businesses that were prohibited from acting as payday lenders in this state include Paragon Funding and Fasts Bucks. Consumers with a complaint can contact the Division’s Consumer Hotline.
Massachusetts has advanced labor laws and employee unions that are set out to look out for their residents for their well-being. They aim to reduce lending to low levels and cushion them from such harsh realities of lending.
By providing such an avenue, the consumer will be well protected from any risk that is involved in unscrupulous business dealings that endanger their economic life. The state has set out to protect its citizens from any practice that puts their future in jeopardy.