What are the Requirements for a Payday Loan in Ohio?
Ohio payday loans are regulated by the Division of Finance (DFI), which makes sure that lenders stay within the requirements of the law. Ohio stands out from other states as one of the friendliest places for borrowers, with several safeguards in place to protect consumers.
Always make sure your lender is licensed as a short term lender in Ohio. If you need help verifying a company’s licensure, simply call the DFI to double check their registration status.
Basic State Regulations
Ohio has a number of regulations in place for how payday lenders may conduct business.
The most notable ones include:
- oan limit: $500
- Loan term: 31 day minimum
- Annual interest rate limit: 28%
- Repayment plan: up to 60 days with no fees
- Annual loan limit: four loans per year
- Number of loans allowed at the same time: only one
- Other loan limits: no more than two loans allowed within 90 days
- Rollovers prohibited
- Collection charge: $20
- Criminal charges: not allowed in case of loan default
Potential Lender Loopholes
While payday lenders in Ohio must be licensed as short term lenders, they may also register to become other types of loan institutions. This loophole allows some companies to charge fees that are not otherwise allowed by payday lenders. As a mortgage lender or credit service organization, for example, borrowers may be charged a fee for having the lender help find the loan. This comes up as a prepaid finance charge tacked onto the loan amount.
Avoid paying the fee by asking your payday loan company up front if they are registered as any other type of lender, and what additional fees you can expect besides the interest rate. If you’re unsatisfied with the responsive you receive, simply move on to the next lender.
Ohio’s laws are meant to help borrowers, so make sure you take advantage of the benefits that come with living in this state and taking out payday loans.