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Louisiana State Payday Loan Laws
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Louisiana State Payday Loan Laws

In the beautiful state of Louisiana, with more than 4.5 million people, and a median family income of $43,000 it’s not one of the most wealthiest states in the country.

In fact, many of those living in the state live well below the federal poverty line. And because of this many individuals find themselves in financial situations they cannot get out because they do not have the financial resources.

And not everyone has a rich family member or friend that can help them out when it comes to getting cash in a hurry when a financial emergency pops up.

So many people have no other option then to turn to lenders for payday loans. The expense of such loans can be very tough on today's average consumer.

Are There Laws in Louisiana for Payday Loans?

Short term loans like these are restricted to some degree in Louisiana. However, these laws are often thought of as being insufficient.

Below are some of the laws in place in the state.

• The maximum length of these loans is 60 days. That means consumers have up to two months to repay the funds if they need to do so.

• The maximum amount borrowed is $350, which is significantly less than what other states allow.

• The finance charges are no more than 16.75 percent of the maximum amount loaned to the individual. That fee can be no more than $45. However, $45 to borrow $350 isn't a good deal.

In addition to these elements, it's important to note that these loans can only come from a licensed lender.

More so, the state also does not allow the lender to attach property to the collection of payday loans. This means they cannot put a lien on your home if you fail to repay the funds.

Another limitation is on rollovers.

The borrower cannot roll over the debt from one paycheck to the next one. Rather, unpaid balances may incur an additional 36 percent interest. However it's possible for the debtor to pay 25 percent of the loan and then take out a new loan to cover the old loan debt.

Those are the only laws in place in Louisiana regarding payday loans.

So are they enough?

Ask most advocates and they will tell you it’s hardly enough. The way the loan terms are set up makes it difficult for consumers to repay the debt not to mention the finance charges that are incredibly high compared to other types of unsecured debt.

The bottom line is if you do need to use a payday loan lender just make sure you know exactly what you’re getting into.

And if you're trapped in the payday loan cycle there are options for you - one of the most successful options is the use of a payday loan debt consolidation program.

Just be sure to do your due diligence about any consolidation program before entering into any agreement with any company.


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