Maryland Payday Loans
Due to strict laws regarding the maximum interest lenders can charge, residents might have difficulty getting a payday loans in Maryland.
A loan of $2,000 or less has a maximum finance cost of 2.75% per month or 33% annually for the first $1,000. Lenders are permitted to charge interest rates up to 2% per month for the first $1,000 and an annual rate of 24% for the second 1,000.
The maximum allowed interest rate for loans exceeding $2,000 but not exceeding $6,000 is 2% per calendar month or 24% annually. Any lender that charges more than 33% APR to borrowers is breaking the law.
Maryland Payday Loan Regulations
Maryland allows cash advances in installment loans, even though payday loans aren’t common. Installment loans are similar to payday loans and can be used to help borrowers who have temporary or urgent cash needs.
How installment loans work
Installment loans give consumers the ability to purchase expensive items and pay off credit cards while repaying their debts over a set period. Installment loans can be provided to borrowers within a matter of hours and lenders may charge high interest rates to supply them with the money.
Installment loans may be a good option for borrowers with lower credit scores. However, the prices of these loans are typically higher than those at credit unions or banks. Maryland residents are not allowed to borrow more than they can afford.
Maryland does not have a maximum loan term. The terms of loans vary from one state to the next. They generally last between one and 31 days.
Borrowers who borrow short-term loans are protected by the Federal Truth and Lending Act. This Act requires lenders to disclose all costs including finance charges and APR before borrowers sign loan agreements.
How to apply for an Installment loan in Maryland
Borrowers aged 18 and over can apply for an installment loan in a branch or online. Lenders require proof of identity and residency in Maryland for loan applications. Some lenders may also ask for recent pay stubs or proof of employment.
Lenders will assess the applicant’s credit score and credit history to determine their ability to repay the loan. The approval process takes between 15-60 minutes. A lower credit score borrowers may still be approved for an installment loan. This is not the case with traditional banks and credit unions. However, this does not apply to any criminal offenses or defaults on loans. The lender must disclose the amount and duration of the loan at the beginning.
Maryland has other lending options
These are some alternatives to Maryland payday loans:
There are many loan assistance programs offered by the federal government to help those in financial difficulties. Temporary Assistance for the Needy Families (TANF), which grants cash to low-income families while they work towards their support, is one example of a program that provides limited assistance.
Many local resources, such as churches, charities, and nonprofits, offer financial assistance and counseling to those in need. Some federal agencies also offer training and education programs for people who are either unemployed or self-employed.
Military program benefits
Veteran service members and military personnel are eligible to receive assistance programs. These programs offer education, healthcare, and insurance benefits that can ease financial strain and burden. The Consumer Financial Protection Bureau is available to help military families manage their finances.
Residents who are short of cash or unable to pay their bills in time can request extensions or longer payment plans from their providers. Low-income residents can also get assistance from local programs to pay their phone and medical bills as well as utility charges.
Maryland State Economy
Maryland is one the most wealthy states in America and currently ranks sixth on the U.S. News & World Report’s “Best States” list. The state’s unemployment rate was 3.2% as of October 2019, which is still below the national average of 3.6%.
The Corporation for Enterprise Development conducted a 2011 survey and found that 25% of Maryland’s women-led households and 29% of minority households cannot cover their basic expenses for three consecutive months using the money they have in savings.
Additionally, 22% percent of Maryland households don’t have basic savings or checking accounts, making it more difficult to manage in an emergency cash crisis. Maryland residents who are short of cash and meet the requirements can apply for an installment loan to see if approved.
Maryland Title Loan Request
Maryland residents in financial trouble can get a title loan for a small amount. Title loans are short-term loans that are secured against the vehicle of the borrower. The vehicle’s title is used as collateral until the loan is fully repaid.
Title Loans Laws for Maryland
Title loans are attractive to consumers, but they are expensive and hard to get. Title loans are illegal in Maryland. This means that lenders cannot operate here. .
Due to the high-risk nature of title loans, many states have strict restrictions. Vehicles in question may be repossessed if the loan terms are not met because they are secured by the borrower’s vehicle.
Borrowers are more likely to default on their loans and have to roll them over. Research shows that only 12% of borrowers can pay their 30-day loans on time. Nearly 40% have to roll over their loans seven times or more. This can trap borrowers and lead to further debt. It can also result in the loss of the vehicle they borrowed against. In 2016, the CFPB reported that 1 in 5 title loan borrowers had their cars repossessed because they failed to pay back the loans.
Alternatives to payday loans
If consumers don’t have any other financing options, they can look at the following:
- To cover any bills that could be due before your paychecks, ask your employer for a pay advance
- Ask for assistance from local nonprofits and financial institutions
- You might be interested in government assistance programs that could offer relief
- Borrow money from family or friends who are trusted
- You can choose to get a personal loan or a conventional loan from a bank/credit union.