Page One of a Payday Loan Contract : What it Should Include
When you take out a payday loan, there are certain inalienable rights that you have that payday lenders must uphold. When providing financing, payday loan companies must provide specific information on page one of your loan agreement.
Details should include:
The amount you are borrowing;
The length of the agreement (usually 10 or 14 days); and
The total cost of borrowing (or what the loan will cost).
In addition, payday loan ads that refer to the cost of borrowing must also provide specific additional information or demonstrate, for instance, the cost for financing. For example, if you borrow $300 for a period of 14 days, the ad should show you how much the loan will cost you if you try to borrow this amount for the stated length of time.
Limits are also imposed on the total cost of borrowing or the loan’s cost. For example, the province of Ontario has established a maximum limit on what it costs a borrower to take out a payday loan. Lenders who issue payday loans cannot charge any more than $21 on every $100 borrowed.
Your Consumer Payday Loan Rights – BC Loans Canada
Other Loan Regulations
Lenders cannot issue rollover loans, or payday financing if another payday loan has not yet been paid. Also, a payday lender cannot request an assignment of a consumer’s wages. A “cooling off” period of two days is allowed for canceling the agreement without penalty.
The Proceeds Must be Issued in a Specific Time Period – Almost Immediately
Once you do enter into a payday loan contract, your lender must issue the loan money without delay. If you enter into a contract over the phone or online, the lending company must provide the proceeds in one hour’s time.
You Should Receive the Loan Amount Sans the Fees
Fees cannot be subtracted from the amount of the loan. For instance, if you take out a loan for $200, you should be given the entire amount. That amount cannot be reduced because of any incorported fees.
With respect to collection, payday lenders can contact you up to three times each week to collect on a loan. However, they have to do so in a manner that does not constitute harassment. That means not using intimidating language or excessive pressure.
Know Your Rights before Signing on the Dotted Line
Keep the above information in mind if you are taking out a payday loan. Make sure that you and your lender legally agree.