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Payday loans are legal in Florida but there are strict regulations around payday loans to protect borrowers. If you are considering borrowing a payday loan in Florida, read this article. We explore the basics of payday loans and how you can borrow one responsibly in Florida, USA. 

Status of Payday Loans in FloridaLegal
Minimum Loan Term7 days
Maximum Loan Term31 days
Cooling Off Period24 hours
Loan Rollovers Allowed?No
Lender FeesMaximum of 10% of loan amount plus $5 verification fee
Multiple Payday Loans Permitted?No
Criminal Action No
State RegulatorOffice of Financial Regulation (OFR), Division of Consumer Finance
Installment Loans Legal?Yes

What Are Payday Loans?

A payday loan is a short-term loan designed to tide you over from one paycheck to the next. A payday loan is one of the easiest and quickest ways to borrow money, making it perfect for unexpected financial situations or emergencies. Payday loans are available to a wide range of customers and a good credit score is not usually a necessity. Generally, a payday loan will be borrowed over a short period.

As with any loan, it is important that before you take out a loan you understand what you will need to repay and ensure that you have a repayment plan.

How Much Can I Borrow in Florida?

In the state of Florida, you can only borrow up to $500 with a payday loan. It is also illegal to take out more than one payday loan at a time. This is because payday loans are designed to be used for small amounts of cash over a short period. Attempting to borrow a large amount of money through a payday loan can end in the borrower accruing large amounts of debt. 

How Long Can I Borrow For?

You can only take out a payday loan from a licensed lender in Florida for a specific length of time; no more than 31 days and no less than 7 days. This is designed to protect the borrower as payday loans should only be used as a short-term borrowing solution. Payday loans tend to have a high-interest rate in comparison to other borrowing options, so they are only really a good choice for a very short-term loan. 

How Do I Know My lender Is Licensed?

To ensure that your loan is legal and that you are borrowing from a reputable lender you must make sure you are borrowing from a licensed lender. You can check if your lender is on the Financial Services Register on the FCA website.You can also ask to see a state-issued license. This is usually readily available either on the website or as a physical copy if you are in a payday loan store.

Fees and Rates in Florida

To ensure that borrowers are not being exploited there are maximum rates for borrowing with a payday loan in Florida. The maximum fee is 10 per cent of the amount borrowed plus a $5 verification fee. So the maximum fee for borrowing the maximum amount of capital in Florida ($500) would be $50. 

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Payday loans can be used for personal expenses, such as vehicle, medical or household bills.

Can I Take Out a Payday Loan in Another State?

The answer to this question is entirely dependent on your situation. You may be able to get a loan from a state where you have temporary residency but have no permanent residence. To qualify, you will probably need proof of address and not all lenders will be willing to take on your case.

If you are living in one state you cannot take out a payday loan in a bordering state, even if payday lending is legal in both states. This is because of the differing regulations from state to state. Lenders can only provide loans to people in states where they have a valid license. This should also be taken into consideration when you apply for a payday loan online.

Why Does Florida Have Such Tight Regulations?

Every state has its own set of rules and regulations for lenders and borrowers. Currently, there are 10 states (plus the District of Columbia) which prohibit payday loans. Across the other 40 states payday loans are subject to unique regulations as decided by that state. There was a huge range of variability between the interest rates across states.

Florida’s regulations are designed to protect borrowers from potentially predatory lenders. Where states have more lax regulation, interest rates tend to be much higher. Some borrowers can find themselves trapped in a cycle of not being able to pay off their loans. If a borrower gets a loan they cannot afford to pay back the high-interest rates will mean that the loan quickly becomes unmanageable. Florida’s restrictions ensure that borrowers are using payday loans as they are designed to be used; for small amounts of money over a short period.

Why Do People Use Payday loans?

Payday loans should be used as a short-term solution to unexpected expenses. The big advantage of a payday loan is that they are incredibly quick and easy to obtain in comparison to other borrowing methods. Payday loans also tend to be available to borrowers with any credit score, meaning those with a poor credit score can still borrow what they need. 

If you are debating getting a payday loan yet are unsure if it is the best choice, read this guide here.

Georgie

Georgie is an expert financial services writer, specializing in consumer and personal finance and state lending practices.