YOU SHOULD AVOID TAKING OUT more than 1 cash advance
payday loans!
If you already have cash advances outstanding, you
should avoid taking out another such loan. When you have more than one
cash advances outstanding, you may find it very difficult to pay the
required finance charge payments, much less paying all or a portion of the
amount financed when the lend comes due. If you need a larger, longer-term
loan, you should seek other, more traditional, lending sources.
How A Payday Loan Works
cash advance payday loans work like this:
You fill out an application and provide the lender
with items such as paycheck stubs and a photo ID.
You sign a loan agreement, write a postdated check
to the lender, and receive your cash.
Your check is held until your loan payment is due -
usually two weeks. The lender then deposits your check - unless you have
replaced the check or have already repaid the lend.
The lend agreement that you are required to sign is
a legal document that obligates you to repay the lend. It also sets forth
a lot of important information. Be sure to take note of the these things:
The Amount Financed: The amount of credit provided
to you or on your behalf. (This is typically the amount of cash you will
receive.)
The Finance Charge: The dollar amount the credit
will cost you, or the amount of interest you pay for receiving the credit.
Annual Percentage Rate (APR): The cost of your
credit as a yearly rate. Because these lends are small, short-term
transactions, the APR is typically quite high. In Wisconsin, there are no
laws that limit the interest rate that a lender can charge.
Total of Payments: The amount you will have paid
after you have made all payments as scheduled. (This is the amount that
you will write your postdated check out for.)
What the resposibilities are
The loan agreement you sign legally obligates you to
repay the loan. Make sure to read the contract before signing it and
retain your copy for your records.
If you have not renewed the lend or paid it in full,
make sure you have sufficient funds in your checking account on the due
date of the lend so your check clears when the lender deposits it.
If you cannot or do not repay the loan, the lender
can seek a money judgment against you for the face amount of the check and
court costs; and, if they were disclosed in the contract, any late
charges, interest after maturity, and NSF fees. Once a money judgment is
obtained, a lender may attempt to garnish your wages.
Many lenders also list past due loans with the
credit bureau. This may affect your ability to get credit in the future.
Other things to consider
If you pay the loan in full prior to its due date
you are entitled to a partial refund of the lending charge.
If you are married and your partner does not sign
the lend agreement, the lender is required to give your spouse a written
notice that you obtained the lend.
questions you may have
The Department of Financial Institutions (DFI) is a
state agency that licenses and regulates organizations that make consumer
loans in Wisconsin where the interest rate is over 18% per annum. This
includes the cash advances organizations. Wisconsin residents may contact
DFI Licensed Financial Services at 608-261-9555.
DFI also licenses and regulates adjustment service
firms, commonly referred to as debt counselors or consumer debt
counselors. These firms help debtors set up and keep on a budget. A list
of the adjustment service companies licensed by DFI. Wisconsin residents
may also contact DFI Licensed Financial Services at 608-261-9555 for the
name of the adjustment service company nearest you.
