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Alaska State Payday Loan Laws
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Alaska State Payday Loan Laws

Like most states Alaska permits the use of payday loans for anyone who needs one. These loans provide individuals with the ability to obtain money for the short term.

There is a fee and there are restrictions. Though the state is not the most firm in terms of laws regarding these types of loans, there are some laws in place that provide protection for individuals who are using these loans.

However anyone who chooses to use a payday loan must keep in mind that these loans can be very expensive and really should only be used as a last choice.

History of Payday Loans in Alaska

Lenders have offered short-term financing like this for decades in the Alaska. In the 1980s, it became more readily available with more options for most borrowers.

However, the state passed Alaska Statute 06.50.100 which provides some lending protections for consumers. As a result, the Alaska Division of Banking and Securities now governs these lenders to some extent.

Laws in Alaska

The laws in Alaska are numerous, however they do not restrict the use of payday loans that much as many people still use payday loans a resource for financial emergencies.

Some of the limitations for payday loans include the following:

• The loan cannot be for a shorter period than 14 days. This is common among payday lenders.

• The loan's maximum value can be no more than $500. This does not include fees charged for obtaining the loan.

• The finance charges are 15 percent or the lesser of $15 per $100 loaned plus a $5 fee.

• It is possible to rollover the loan a maximum of two times. There is no maximum to the number of payday loans individuals can have, though.

The law enacted in June of 2004 provides for the Department of Community and Economic Development to have regulatory authority over these lenders.

It is possible for borrowers to walk away from such loans without any cost to them. In addition, the law prohibits collection practices by lenders and third party companies that it considers improper.

This includes threatening legal action or the pursuing of criminal charges. But if the lender decides too they can still sue you in civil court.

But either way you cannot go to jail if you truly cannot make the payments, in other words if you're trying to make the payments but just can’t do it you're not doing anything illegal.

But if you're not making payments on purpose then this would be considered fraudulent activity and then you are subject to charges.

Because of the huge interest rates and fees many people get caught in the payday loan cycle – which has them re-loaning over and over again to pay off other loans. This causes so much stress and heartache for many people.

Unfortunately many people think they have no way out and that’s simply not true – some people even resort to filing bankruptcy. There are options and one of the most successful options available to people get out of the payday loan trap is a Payday debt consolidation program.

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