Cash Advance New Jersey
Payday lending is prohibited in the state of New Jersey. This means that lenders in the state are not permitted to cash or advance money on a postdated check. Strict laws in the “Garden State” also prohibit lenders from cashing a paycheck to anyone who does not have a banking account. Consumer lenders operating in the state must comply with the Consumer Loan Act (N.J. Stat. Ann. tit. 17, 1 et seq.) Borrowers should be aware of the regulations and protections that come with short-term lending in New Jersey.
New Jersey’s Cash Advance Laws
While shorter-duration finding is not permitted in the state, short-term loans can be offered by banks and licensed lenders at the 30% usury cap. The maximum personal loan amount that can be taken out in New Jersey is $50,000.
For loans $1,000 or less, the maximum term is 36 months and 15 days. For loans greater than $2,500 but less than $5,000, there is a maximum loan term of 60 months and 15 days. Loans more than $5,000 may not have a loan term that is more than 84 days and 15 months. And loans that exceed $10,000 may not be taken out for more than 120 months and 15 days.
Payday Loan Regulations in New Jersey
Although short-term loans are illegal in the state, New Jersey residents can opt for cash advances in the form of installment loans. Like shorter-duration funding, installment loans can offer assistance to borrowers with emergency or temporary cash needs.
How Installment Loans Work
These are personal loans that customers can pay back over a fixed period of time, unlike payday loans. Although installment loans might make sense to borrowers who have lower credit scores, prices for these loans tend to be higher than those charged at banks or credit unions.
The maximum loan amount for a personal loan in New Jersey is $50,000.
There is no specified maximum loan term in New Jersey. Loan terms differ by state and generally range from one week to 31 days.
The Federal Truth and Lending Act has certain protections in place for borrowers who take out short-term loans. This Act mandates that lenders disclose exact costs, APR finance charges, as well as specified terms, before borrowers sign loan agreements.
Applying for Installment Loans in New Jersey
Eligible New Jersey residents can apply for a personal loan online. The application approval process can take anywhere between 15 to 60 minutes. Applicants must be at least 18 years of age in order to apply for a loan.
Lenders will consider credit scores and history, as well as debt-to-income ratio when determining applicants’ eligibility. Potential borrowers with a poor credit history or nonconventional forms of income are still eligible to apply for an installment loan.
While requirements differ from lender to lender, most will require the following information upon applying:
- Proof of identity and address
- Recent pay stubs and/or proof of employment
- Social Security number
- Banking information
What Other Lending Options Are Available in New Jersey?
Potential borrowers should be aware that personal loans are not long-term financing options and should assess their ability to afford one before applying. Those seeking alternative options may consider the following:
New Jersey residents can see if their company or place of work can issue an employer-led payroll advance which allows consumers to get part of their upcoming paycheck days or weeks ahead of time.
Those short on cash can access their retirement funds early and then replace them at a later time, with interest. Consumers considering this option should note that the IRA has a maximum loan amount of 50% that can be borrowed from one’s total 401(k) funds.
Cutting Discretionary Spending
Residents can cut out unnecessary expenses and save money on entertainment by visiting one of New Jersey’s free attractions such as the Cape May County Park and Zoo, the Princeton University Art Museum, the Twin Lights Historic site, and more.
New Jersey State Economy
New Jersey has an unemployment rate of 3.2% which is slightly lower than the country-wide average of 3.5%. The state has a diverse economy, with key industry sectors of life sciences, information technology, financial services, pharmaceuticals, manufacturing, and transportation.
The median income per household in New Jersey in 2017 was $80,088, a 5.2% percent growth from the previous year. This is higher than the U.S. median income of $63,179.
While the income inequality in New Jersey at 0.493 is higher than the national average, the poverty rate is slightly better than that of the country’s and comes in at 10.7%.
Residents who are unable to make ends meet between paychecks or need help covering an unforeseen financial emergency can apply for a cash advance in New Jersey and see if they are approved.
Requesting Title Loans in New Jersey
Auto title loans are short-term cash loans in which a borrower’s vehicle is used as collateral. This means that borrowers allow lenders to place a charge on the title of the car being borrowed against, to ensure the secure payment of the debt owed. Borrowers also temporarily yield the title of the vehicle to the lender.
Title Loans Laws in New Jersey
Title loans are not legal in the state of New Jersey due to the high-interest rates often charged by lenders. Such rates violate New jersey’s usury rate laws that cap charges at 30%.
While title loans can be a viable resource for consumers who have exhausted other loan options, there are risks that come with such short-term lending. Annual percentage rates or APRs can be as high as 400% in some states for a loan taken out for an average of just 30 days, causing them to be unaffordable for many consumers.
Borrowers who are unable to make their payments are often forced to extend or renew loans, or in some cases, take out additional debts to repay previous ones. In fact, a 2015 PEW study showed that one out of nine auto title borrowers is unable to meet payment terms.
The rates of repossession associated with title loans are also high. In fact, a 2016 report by the Consumer Financial Protection Bureau (CFPB) found that one-in-five auto loan borrowers lose their vehicles to repossession.
Why Consumers Ask for Title Loans
New Jersey residents who find themselves in an emergency cash situation or who are unable to make ends meet, can consider the following alternative options to auto title loans:
- Ask bill companies for extensions on payment due dates
- Request an advance from employer
- Consult a financial expert or a community development credit union for financial advice and guidance
- Borrow from trusted friends and family members
- Find social service programs and agencies that may be able to offer financial assistance programs
*OpenCashAdvance.com strives to present accurate information on each state’s regulations; however, we do not guarantee the 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: www.newjersey.gov