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Missouri Installment Loans
There are many installment loans companies in the state of Missouri. Therefore, to apply for one a consumer needs understand the laws governing the application of such services.
The Missouri Division of Finance is the body with the responsibility of regulating this lending service. Due to the poor financial state of the economy, many low income and middle class families are turning to Installment Loans to keep going.
The maximum amount that a consumer can borrow from a payday lender is $500. The consumer then issues the lender with a cheque and they retrieve money from the consumer's account electronically from their bank account using the ACH (Automated Clearing House). If the funds are insufficient to settle the debt, it will create an overdraft charge on the consumer's account.
The lender may collect the payment or sell the debt to a collection agent in the event the borrower defaults. When the consumer fails to repay the loan and cannot be convinced to do so through the correct channels such as letters and phone calls the lender may sue the consumer in a civil court.
The court can then give a direction on how the debt can be collected for example through account levies, property liens and wage garnishment. The collection agency should not call your employer or get a warrant for you to be arrested since it is not a criminal offence. However, if the lender has enough evidence to prove that the consumer intended not to pay up then the warrant is justified.
After the lender sells consumers' accounts to collection agents, the consumers are obliged to repay the debt to the agents. In relation to this, the Fair Debt Collection Practises Act manages the relationship between the consumer and the agent. It requires the collection agent to cease calling the consumer when they notify them in writing. This is known as a desist notice.
According to the law in Missouri, only a licensed lending institution should only make such loans. The amount loaned must not exceed 500 dollars for a period between 14 days up to 31 days. The lender should not charge more than 75 dollars.
The APR on $100 loans taken for just 14 days and a fee of $75 is 1980%. In this state, it is permissible to roll over such a loan six times. The consumer is required to cut the principal loan amount by at least 5% every time the renew it. On the other hand, the lender is barred from making ACH withdrawals in collecting any single cheques made.
Under Missouri law, it is illegal for a consumer to give the lender a cheque to a closed bank account, or to an account that was closed between the period the cheque was written and the date that the two parties agreed the cheque was given.
However, the state's law also state that it is legal to give out the cheque to the lender when the amount of money in the account at that particular time when the lender accepted it was insufficient to cover the loan and they agreed to present the cheque later.
A lender will be contravening the law if they make repeated ACH withdraws in order to settle the debt. In addition, if the borrower closes their account before they make the payment, they will be breaking the Missouri laws governing this practise.
Further guidance from the Division of Finance can help you know what to do when you want to close an account in response to ACH withdraws made repeatedly or after making some payment to the lender.
A Missouri attorney with a good experience in consumer law can provide you with proper and more information in understanding the lending laws in this state.
In recent events, Missouri legislators are advocating for the introduction of an interest cap to protect the borrowers and impose more control on this lending practise across the state.
One of the problems associated with Missouri Installment Loans are that in this state sometimes some of the lenders operate outside the state jurisdiction and thus a borrower might feel exposed to risks of fraud or identity theft.
Some lenders are seen to have indecent behaviour such as harassing the consumers around the work place, a practise that is illegal.
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