The Ghost-town That Is Payday Lending In New Hampshire
If a state is going to provide you with a service so that you have a resource that will enable you to take care of yourself and your family in case there is a situation arise out of your control or maybe you just can’t pay your bills point blank, shouldn’t they have regulations that are not so restrictive to the borrower and the lender that no one wants to open a store there.
It’s perfect that the state wants to regulate and watch what is deemed to be a predatory practice and keep those suckers in line. That’s a given. The thing is if you’re going to dangle a carrot at your citizens and say, ‘heck, yeah you can have a payday loan…’ and then you hear the word ‘but’. It all goes downhill from that ‘but’ and your world comes crashing down because there goes your resource.
That is the case in New Hampshire from the research that was attempted. There were not three top stores in the New Hampshire vicinity. There were not three stores that would come up in a search of payday lending stores in New Hampshire whose websites would populate with any information as far as a physical building being in the state. The one that showed a picture of a building, had a three-star rating but had a website that belonged to another lender. All of the other ones were online vendors which basically said they would search for lenders for you but they didn’t actually provide the loan. None of those that popped up had above a one or two-star rating.
There are not three that this writer would feel in any way comfortable putting down as, not only the top three, but as existing in New Hampshire. Let’s get into a little bit why that might be. Why the lenders don’t want to live in New Hampshire.
NEW HAMPSHIRE PAYDAY LENDING LAWS
In New Hampshire it is required that all lenders be licensed which is to protect the borrow from shady dealers. Payday lending is very restricted, not banned, not illegal, but very restricted to the point that it should be illegal.
A borrower in New Hampshire is allowed to take out a maximum loan in the amount of $500. That’s pretty fair and reasonable. If the amount is too large, which actually, if you’re down on your luck, $500 is pushing the comfortable-to-pay-back limit.
The lender is not allowed to charge an APR higher than 36%, that is the cap and no lending company is permitted to go any higher than that. That is significant for payday lenders. That would be a cause for most stores to run for the hills. They can charge upwards of twenty times that…may be an exaggeration, but they are exorbitant with their APR. Thirty-six per cent is nothing to make them want to open there.
Finance charges are also limited and cannot go above $1.38 on a $100 loan that would be given for a two-week term and that refers to anything like processing fees, approval fees, any kind of fee that a payday lender can think of is included in that dollar and thirty-eight cents. Repayment can be as little as seven days and not to exceed thirty-one days.
That one can be difficult for a borrower if they are not mindful of their budget. If you take out $500 because your furnace explodes, but you don’t take into consideration that you have to pay that back by the following month in addition to your monthly required expenses, you could be in an even bigger bind next month. The problem with that is it is illegal for you to take out another loan from that or any other lender if you haven’t paid your debt off. You and this lender will be in a world of trouble.
There are absolutely no rollovers and no renewals and no extensions of any kind in New Hampshire. It is expected and required that you pay the loan in due time. It better be a very good reason to take out one of these loans and there better be a budget in place so you know without any doubt that you can pay it back.
If you borrow with the knowledge that you cannot pay the loan back when it is due, you will be taken to court. That is one of the exceptions to the ‘defaults not being considered as a criminal offense in New Hampshire’ regulation. If it is proven that you purposely did this or that repayment of the loan was intentionally stopped by you or there was an account deliberately closed, big trouble.
Now civil trials are perfectly legal in New Hampshire. If you don’t pay on time, the lender can sue you in civil court, and because the law states that you are required to pay in due time, you’ll most likely lose.
Collection fees are not regulated or specified in the law. Lenders can be free to set these fees at their discretion. Having an outstanding balance will mean that you will accrue an annual interest rate in the amount of 6%. You can request to make partial payments of a minimum of $50 with no penalties attached.
You can apply for more loans (really?), but you have to wait the cooling off period. The required time for that is sixty days after the date that you paid the last debt off. To be eligible for the loan, you need to be eighteen-years-old, be a U.S. citizen or else a permanent resident, need to have regular money coming in/pay stub as verification or some type of verification of your income, your employer’s information, social security card, and a valid checking account/bank statement as verification.
New Hampshire is making payday lenders’ lives difficult and kind of making the borrowers’ lives a little tough too. In a sense, it makes the borrower think before taking these out about where else they could possibly turn instead of going this expensive route. Being required to pay it back by the following month will catch some people in trouble.
ALTERNATIVES TO TAKING A LOAN
Make a realistic budget. Figure out your daily and monthly expenses. Find where there are places that you’re doing unnecessary spending and cut it out. Use that money towards the necessary bills.
- Non Profit
Contact the local non-profit credit counseling provider and get some help with lining you out in your finances. Making a budget on your own may prove too difficult. If you’ve found yourself unable to pay your regular monthly expenses, and you’re turning to these lenders, you definitely need help with planning a budget.
- Checking account
Contact your bank about adding overdraft protection on your account. This will save you loads of money on fees with your bank.
- Credit cards
If you have more than one credit card, use only one so that you’re able to limit the amount of debt you create and also to be able to track the expenses that you’re creating.
The credit counselor may be able to help with this, but you need to call all of your creditors and ask for more time to pay the bills or be put on some kind of different pay cycle, maybe lower your rates. See what they can work out for you. Even utility companies are able to do this sometimes.
See if there is any possible way to group all of your debt into one monthly fixed rate either through a balance transfer, an installment loan or a personal loan if you can qualify.
Payday lending in New Hampshire is basically nonexistent. They don’t want to call it illegal, but they have it so restricted, no one wants to operate there. In their defense, they do allow it. Just gotta follow the rules. We’re asking the states to regulate, they regulated…and some.