Payday Loan Laws in Kansas
Payday loans are short-term loans that usually last between a week and a month and are for several hundred dollars. These loans are generally strictly regulated by state governments because they have the potential to take advantage of poorer borrowers with high interest rates and fees. In Kansas, businesses must have a license to issue payday loans.
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Term
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In Kansas, the minimum length of time a payday loan can be taken out for is seven days. The maximum length is thirty days. The interest rate can be charged over each fourteen-day period.
Amount and Numbe of Loans
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Kansas has no minimum loan amount for payday loans, but it does cap the maximum loan at $500. Individuals in Kansas may only have two payday loans taken out at a time.
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Fees
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Kansas caps the fees that a payday loan company can charge at $15 per $100 lent. Since payday loans in Kansas are capped at $500, the maximum fee that can be charged is $75. These fees are included in the interest rate. Most payday loans are due within two weeks of being issued, so the 15% interest rate over two weeks caps the maximum annual percentage yield at 390%.
Complaints
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If a consumer has a complaint about a payday loan company, he can submit it by mail to the office of the state bank commissioner at 700 SW Jackson, Suite 300, Topeka, Kansas 66603. In order for the commission to investigate, you have to include copies of all of the documents and contracts involved in the case. Be sure to retain your originals and send only copies.
Additional Fees
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Payday loan companies may only collect one non-sufficient funds charge per loan.
Less Expensive Alternatives
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Payday loans can be very expensive and eventually create a perpetual cycle of debt that is impossible for consumers to break out of. When you are short on money, consider less expensive sources of money including credit cards, overdraft protection from your bank, or a signature loan company. Though these are not inexpensive options, they are significantly cheaper than most payday loans. If you must get a payday loan, at least compare the rates from several stores to find the least expensive option.
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