Cash Advance Minnesota
Many legislators are fighting for stricter cash advance regulations. Sen. Al Franken, D-Minnesota, is one of the advocates against these types of short-term loans, but his qualms are unlikely to change state regulations before new federal laws arrive . Right now, the Consumer Financial Protection Bureau is looking into passing federal restrictions for all cash advance lenders. For states with lighter regulations, these laws will likely increase the severity of current cash advance laws. Let’s take a look at the laws as they stand right now in Minnesota. To get started with your loan request, head on over to our secure loan request form.
Minnesota Cash Advance Statutes
The maximum loan amount in Minnesota is $350. The loan term can be as long as 30 days, so you can request a 30-day payday loan. Minnesota has very specific maximum finance charges that vary according to how much money you borrow.
For a $0 to $50 loan, you can be charged up to a $5.50 finance charge; $50.01 to $100, up to a 10 percent finance charge, plus $5; $100.01 to $250 loan, up to a seven percent finance charge ($10 minimum), plus $5; $250.01 to $350, six percent finance charge ($17.50 minimum), plus $5.
This means that if you were to get a 14-day, $100 loan, you would at most receive a $15 finance charge. After maturity (if you default on the loan), your monthly rate must not exceed 2.75-percent. Your lender is allowed to charge you a $30 NSF fee.
Minnesota Payday Loan Regulations
Short-term, small-dollar funding is regulated by the same rules whether you call it a payday loan or a cash advance. That means the rules we listed above apply here as well.
- How Payday Loans Work – Many borrowers use this type of funding to address short-term emergency expenses. This can be for everything from paying off another debt to fixing a broken automobile. The loan is paid back usually within a couple of weeks of the cash arriving.
- Maximum Amount – A lender may provide up to $350.
- Repayment Extensions – Rollovers are not permitted, as you cannot pay your loan with any money obtained from a loan by the same lender.
Minnesota State Economy
The unemployment rate in Minnesota is below the national average. In May 2015, the rate was 3.8-percent. That’s low compared to nearby states Wisconsin (4.6-percent) and Michigan (5.5-percent), but very similar to other states in the area. While unemployment rates can give you an idea as to how your local economy is doing, you should always factor in your personal circumstances before applying for a cash advance.
A short-term loan can help you tackle those small debt crises that befall everyone. Just make sure you are up to date on the latest Minnesota cash advance laws.
Requesting Title Loans in Minnesota
Minnesota residents who are experiencing cash shortages or financial hardship can also opt for a title loan. Auto title loans are short term loans in which a consumer’s vehicle title is used as collateral.
Title Loans Laws in Minnesota
Minnesota is one of the states under which title lending is prohibited by law, due to the $350 cap on small-dollar loans. Additionally, loan terms cannot exceed 30 days and must not cost more than 33% APR. To find out more about the rules and regulations associated with short-term lending in their state, Minnesota residents can reference the Minn. Stat. § 47.60 etseq statute.
Most states have placed heavy restrictions on title loans due to their high-risk nature. Such loans often come with steep charges as well as the potential for repossession in the event that a consumer fails to meet terms and payments.
In fact, studies show that only 12% of title loan borrowers are able to pay back their 30-day loans in time, while roughly 40% are forced to roll their loans seven or more times.
In many states, short-term loan lenders are targeted due to such predatory lending practices. Yet some financial institutions, such as The Community Financial Services Association of America, argue that the government should specifically address illegal lending practices and not the short-term lending sector as a whole.
Alternative Financing Options
Due to the overregulation of such loan options, consumers who do not have alternative financing options can consider the following:
- Ask employers for a paycheck advance to cover bills that may be due before paychecks
- Seek assistance from nonprofits or other local financial institutions
- Look into government assistance programs that may be able to offer relief
- Borrow money from trusted friends or family
- Opt for a personal loan or a more conventional loan from a bank or credit union. In such cases, good credit standing is often required.
*OpenCashAdvance.com strives to present accurate information on each state’s regulations; however, we do not guarantee accuracy of data as presented. Please contact your state’s department of finance or visit your state’s official website for the most accurate information and inquiries. You can find your state’s site here: mn.gov/commerce