High Charging Mississippi Payday Loans

If you are living in the Southeast and take out payday loans, you should realize that Mississippi is legally allowed to charge its patrons higher fees than in any other surrounding state.  Payday lending has been quite controversial since it allows borrowers with less than stellar credit to take out loans that they may or may not be able to pay back.  Due to the outrageous interest rates that are normally associated with taking out a payday loan, it is extremely difficult that someone who misses the repayment does not fall into a vicious cycle of debt.

Therefore, the Mississippi Board of Supervisors are trying to change payday lending in the state and they have asked their lawmakers to put a cap on interest rates that does not exceed 36 percent and to prevent payday loan lenders direct access to a borrower’s personal bank account.  The problem with the payday lending cap is that it would put many lenders out of business.  Many argue against the cap since if payday lenders cannot survive the new law then people who need fast cash are unable to access it.  Payday lenders provide money to borrowers who are unable to receive funds through a traditional banking source.

In Mississippi, payday loan borrowers are protected by the state.  They are able to take out a loan for up to $400 over a period of 30 days, maximum.  The interest rate is limited to 18 percent which is automatically added to the borrower’s post marked check.  Rollovers are not allowed in the state.  A rollover loan is when the borrower is unable to payback the original loan and must take out another payday loan in order to payback the first on time. 

There are approximately 1,100 payday lenders in the state and there are around 10 complaints per year with over 300,000 transactions per year.  Mississippi’s fees are the highest in the region as Alabama comes in close with 17.5 percent and Louisiana with 16.75 percent.   Florida, on the other hand, only charges 10 percent of interest.