Payday Loan Laws in the State of Virginia

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When people with poor credit need money fast, one of the few sources they can turn to are payday loans. These loans are known for being easy to get because they do not require a high credit score and sometimes require no credit check at all. These loans are also known for their high fees and interest rates. A number of states, including Virginia, have taken steps to regulate these loans to decrease predatory lending.

Loan Fees

In Virginia, the payday loans have the fees associated with them capped at $5 for verification, 20 percent of the loan for an origination fee and 36 percent annual interest. This results in finance charges of $26.38 for a $100 loan for 2 weeks, which is equivalent to an annual percentage rate of 687.76 percent. Payday loan companies are limited to charging a $25 fee for a returned check for insufficient funds.

Loan Amounts

Most payday loans are limited to $500 in Virginia. However, if you use your car title as collateral for the loan, there is no limit on how much you can borrow.

Loan Duration

Payday loans in Virginia must be at least two pay periods long, meaning the minimum loan is usually 14 days. These loans cannot be extended or rolled over.

Number of Loans

In Virginia you are limited to one payday loan at a time. In addition, you must wait at least one day between paying off one loan and taking out a new one. After you've taken out five payday loans, you have to wait a month and a half before taking out a sixth loan. Finally, if you are forced to enter a payment plan, you must wait three months before taking out another payday loan.

Consumer Protection

If you default on your payday loan, you cannot face criminal charges in Virginia unless the company can prove you took out the loan with the intent not to pay it back. However, you can be taken to civil court and forced to pay back the money in addition to court costs and attorney's fees of up to $250. If you have a complaint about a Virginia payday loan company, contact the Virginia Bureau of Financial Institutions at the State Corporation Commission, 1300 East Main Street, Suite 800 Post Office Box 640 Richmond VA 23218.

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