Missouri and payday loans, what a combination! These laws were written to protect the borrowers but they, like many other states, have had to have had a nudge by the loan companies at the time of writing.

What are the laws?

The laws of Missouri state that you may take out a payday loan from between 14 and 31 days. The loan cannot exceed $500.00 and you may take out more than one loan at a time.

Roll overs are also allowed in Missouri and this can set you up for some serious financial hardship. One can easily find themselves taking out payday loans to cover payday loans, and this cycle, the payday loan trap, can continue until default of your loans, and worse.

What about fees and interest?

The fees associated with payday loans are high per loan and per roll over, and add up quickly. The state did write into law a payday loan may not exceed 75% of the face value of the loan for the duration of the loan.

Do not think this is a good thing. For example, the APR of a $100.00 payday loan for 14 days is 1980%. Now, add in a roll over and you have quite the payday loan debt created.

Why use these companies?

People have bad things happen and run short of cash. Because many have no idea how these loans work and how incredibly expensive they can become, they run to the companies and get their loan. Instant cash has a great attraction power.

Before they know it, the loan is due and they are still short, so they roll it over. Next payday the loan is due again, you see the cycle. Next they take out another payday loan to cover the first, and before they know it, there is no paycheck on payday to cover any of them, and the checks bounce and the collections start.

What can the collectors do?

General practices are repeatedly calling your home, your work, your references, and threatening legal action. They can be brutal! The best thing anyone could do is avoid these loan companies completely. If you do have to use one, pay it off in full on the first due date!

What can a person do if in trouble?

If you find yourself in trouble with payday loan debt you need to look into using a payday loan debt consolidation company. They can stop the calls, interest and collection activities and set you up on some realistic payment plans that will give you a bit of peace of mind and get you back on track with your finances.

I hope this article on Missouri payday loan laws helps you make some wise decisions on how to deal, or not deal with these companies.

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