What are Payday Loans?

Payday Loans in Rhode Island might be beneficial when you need money quickly yet are strapped for cash due to unanticipated bills and a tight budget. Payday loans are a kind of short-term loan that may provide you with rapid access to money if you find yourself in a financial bind. Continue reading about the regulations about payday advances in Rhode Island and anything else pertinent to your understanding of this topic.

What Do You Need to Know About Payday Loan Process?

Both in-store and online applications are reasonably straightforward. When applying for a loan, you’ll need a valid form of identification, your Social Security Number (SSN), and your bank account details. You should make sure that you’re comfortable sharing personal information about yourself with a lender.

To get a payday loan, you must have a steady source of income, be at least 18 years old, and be a legal resident of the United States of America.

What Distinguishes Rhode Island From the Other States in Terms of Payday Loans?

When it comes to loans, Rhode Island is distinct from other states in that, unlike other states, they do not restrict the amount of time you may borrow money but rather the maximum amount of time the loan can be for. The shortest possible time frame is 15 days.

The regulations in Rhode Island allowed one rollover for every cash advance loan taken out. The rollover fee that a lender may impose is determined by the remaining time on the contract for the loan.

Payday Loans in Rhode Island: What Are the Rates and Fees?

The following is a synopsis of the primary fee structure that the law of Rhode Island requires lenders to pay within the state of Rhode Island:

  • Lenders can charge an interest rate of 10% on a loan of $100; the lender can’t charge more than 260 percent APR. 
  • A person can borrow as little as $3 per year. 
  • They shouldn’t cost more than $500 each.
  • Creditors can charge up to 12 percent for loans without an agreement and up to 21 percent when there is an agreement.

What Are Payday Loans Laws and Regulations?

Payday Loans in Rhode Island are regulated by the statutes included in the Ann. 19-14.4-1 series. Before being allowed to provide loans, payday lenders must first satisfy the requirements of this legislation and get a license. A person is only allowed to borrow up to a certain amount of money.

  • Maximum loan amount: $500
  • The loan length is at least 13 days.
  • Ten percent of the total loan amount is required for financing costs.
  • APR: The annual percentage rate (APR) for a loan of $100 over 14 days is 260 percent.
  • There is no mention of any collection fees.

You are authorized to have three outstanding loans at any one time, each of which may be for a maximum amount of $500, and you are allowed one rollover of each loan.

Is It Legal to Lend Money on Payday?

Yes. Rhode Island residents can get payday loans. Your credit score won’t affect whether you get a loan. Find out how these rules affect your ability to borrow money.

What Is the Maximum Payday Loan Term?

There is no maximum duration that may be attached to loans; nevertheless, the shortest time possible is thirteen days. The borrower may prolong the loan term by simply making one more payment toward the finance charge.

Borrowers can take out as many as three loans simultaneously in the maximum amount allowed by their state’s rules. The maximum amount that may be borrowed is $500, and the interest rate is $15 for every $100 that is borrowed. The annual percentage rate (APR) for cash advances in Rhode Island is 390 percent.

Should I Consider Anything Else Before Getting a Payday Loan?

You may find it challenging to make ends meet between paychecks, but Rhode Island has programs like the Supplemental Nutrition Assistance Program (SNAP) that may assist. It would help if you also thought about the various available forms of financing that are out there.

  • Obtain a Loan From a Financial Institution Such as a Local Bank or Credit Union.

You may or may not be able to receive a modest loan from a conventional source, depending on the state of your credit. Be cautious about looking into these options before applying for a loan. You may have trouble repaying since the interest rates and conditions are often lower than those associated with payday loans.

  • Advances on Credit Cards May Be Obtained. 

If you own a credit card, you may be able to take out a loan against the available credit on the card. Although the interest rates are far higher than those associated with payday loans, repayment conditions are significantly more forgiving.

  • Ask Friends or Relatives for Aid.

If you have exhausted all other options, turning to family and friends for financial support may be the only way you will be able to pay a payment or cover a cost. They may be more ready to lend to you than you give them credit for, but you need to pay it back on time to prevent hurting their emotions or straining your connection with them.

Payday Loans in Rhode Island: The Bottom line

If you need money to meet an unexpected payment or demand and are considering applying for a payday loan, Rhode Island has laws in place that assist keep the cost of this kind of credit reasonable. Make use of payday loans as a stopgap measure. If you find yourself in need of assistance in the future, give some thought to getting in touch with a credit counselor who can assist you in resolving your ongoing financial issues.

FAQ About Payday Loans

  • Where Can I Register a Complaint Against a Company That Provides Payday Loans?

It is recommended that you get in touch with the Department of Business Regulation in Rhode Island.

  • Is There a Waiting Time in Between Payday Loans and Getting Another One?

Even if Rhode Island does not mandate a waiting time between loans, it is a good idea to do so. When borrowed often in a short period, the costs associated with these items may add up quickly.

  • Does the State of Rhode Island Have a Mandatory Payback Plan?

No. Payday loans are not subject to any repayment plan imposed by the state, although you may be able to request one from your lender. You are allowed one rollover if you do not attempt, which is the greatest thing you can do in this situation.

Julie Snearl
Senior Personal Finance Writer at | + posts

Editor and writer for over a decade , she has written and edited finance for both national technical and consumer readership, Julia Snearl is the editor for Personal Finance in Bridgepayday. Her experience in editing business books also includes working as the editor of charts of Ahead of the Curve. More than 3 years' experience in editing content for finance on Bridgepayday, Julie is interested in learning about how to use digital content to assist people make better financial choices.