How Is the Loan Amount Regulated in Washington?
The maximum loan amount in Washington is $700 or 30% of a person’s gross monthly income, whichever is less.
Loan Cost in Washington
For every $100 loan for 2 weeks, the maximum charge is $15. Also according to the payday loan brochure from Washington State Department of Financial Institutions (DFI), the rate of a payday loan of $500 or less is 15%, and the one from $500 to $700 has a rate of 10%.
The annual percentage rate for a Washington payday loan can be as high as 391%.
Cost Calculation For a $100 Payday Loan in Washington
If the term is 14 days:
Loan cost: $100 * 391% * (14 / 365) = $15.0
Total amount to return: $100 + $15.0 = $115.0
What Is the Maximum Loan Term in Washington?
- The minimum term is 45 days and at most 8 loans every 12-month period are permitted. And also “under Washington law, your loan term must be your next pay date or the pay date after that if your first payment date is within 7 days of the date the loan is made. The loan term cannot be longer than forty-five days unless you enter into an installment plan or otherwise agree to a longer loan term”. (DFI’s Payday Loan Brochure)
- Borrowers of payday loans in Washington are required to have a repayment schedule. Notifying the lender on or before the due date comes with no cost. For a loan of $400 or less, a 90-day repayment schedule should be offered, and for a loan higher than that, there should be at least 180 days.
- Rollovers, renewals or extensions of a loan are not allowed in Washington.
According to rule changes by the Consumer Financial Protection Bureau, starting from July 2020, lenders are not obligated to check whether a borrower is able to pay back a loan. Think carefully before you decide to borrow a payday loan, and manage your money spending reasonably to avoid debt trap.
- Non sufficient funds should not go over $25.
- Collection costs are allowed.
- No criminal action against borrowers is considered legal in Washington.
To know more about the payday lending regulations in Washington or file a complaint against a lender, you can visit the DFI official website.