There are a number of legislative measures that have been created concerning advanced cash loans, also known as PayDay loans or in some cases title loans. States like Pennsylvania, Georgia, Indiana, Florida, Michigan, Illinois, North Dakota, Oklahoma, Virginia, and New Mexico. Although New Mexico passed their legislation that regulates advanced cash loans back in 2007, it's a good idea to review such measures, especially because a number of other states may be passing similar legislation. The following points detail New Mexico's regulations:
* A borrower who is unable to repay a loan is automatically offered a 130-day payment plan with no fees or interest
* Once a loan is repaid, under the new law, the borrower must wait 10 days before obtaining another PayDay loan
* PayDay regulation allows the term of a loan to run from 14 to 35 days, with the fees capped at $15.50 for each $100
* 50-cent administrative fee to cover costs of lenders verifying whether a borrower qualifies for the loan
* Limit PayDay loans to, at the most, $1,000
* A loan is forgiven once the customer had paid twice the amount that was originally borrowed
New Mexico's regulations of PayDay loans are the right step forward, considering the purpose of the loan is suppose to be short-term, so having this in place ensures that the consumer doesn't get caught in an endless debt cycle and that the lender receives profit for rendering appropriate services. More are considering to adopt similar regulations, my guess is that 2010 will the year of greater loan regulation.
Article Source: http://EzineArticles.com/?expert=Caleb_Menskil
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