Payday lenders in Minnesota should be aware of the laws set by the state government to regulate the industry. These laws help borrowers feel more confident and secure in their decision to seek out this form of nontraditional credit.
According to Cash Advance, a member of the lending industry since 1997, each state has very specific laws governing these loans. In Minnesota, borrowers can take out a maximum loan of $350 at one time and the maximum term for such a loan is 30 days. Loans under $50 will have a fee of $5.50, while loans from $50 to $100 will require a 10 percent fee, says the company. For loans of $100 to $250, the fee will be 7 percent, while loans over $250 will have a 6 percent fee and a $5 administrative fee. Consumers in each state will encounter an entirely different set of regulations when they look for a payday loan. Some states have outlawed the industry altogether. Others are considering reversing bans. A few states are adding restrictions to the industry, including interest rate caps usually near 36 percent. Payday lenders in some communities function with little to no government involvement. The most important detail to remember is that both consumers and lenders need to keep themselves up-to-date on all local regulations.