The state of Ohio has some of the strongest payday loan regulations in the country. The laws that govern payday loans in Ohio are to protect consumers from exploitation. They also ensure that the borrower does not sink deep into debt through irresponsible borrowing. The Short-Term Lender Law (STLA), provides significant protections for Ohio borrowers. For instance, it prohibits Ohio companies from giving short-term loans over the internet or telephone. The law also mandates a loan duration of no less than 31 days. Interest rates or APR can not exceed 28% APR. Newer changes restrict the number of loans a borrower can take on at any given time.
These restrictions also apply to installment loan companies. But there are subtle differences between both forms of financing. It’s best to read through the details to get a better handle on them. As with payday lenders, do as much research as possible when applying for Ohio installments loans. Don’t settle on the first one or two services you come across. Take your time and check out our list of companies that offer payday loans in Ohio.
Ohio residents can not have more than one installment loan or payday loan at a time
You cannot, therefore, take out multiple payday loans if you’re an Ohio resident. You can have two outstanding loans out any time over a 3 month time period. This is to ensure that you do not end up borrowing more than you need. You run the risk of falling into a debt trap. You cannot cheat the system. When it comes to online loans, Ohio lenders have unlimited access to every potential borrower’s credit report, and will already know if you have an outstanding debt. Your credit report contains all the statuses and dates of every debt taken in your name. These debts sometimes include Ohio payday loans and often include installment loans
You may ask what will stop a lender from giving out more than one payday loan at once. But keep in mind that the lenders are registered with the state and must follow state regulations. Their activities are overseen by the STLA to ensure that they do not expose unsuspecting consumers to excessive debts. You can read more about specific consumer credit limitations in Ohio here. This PDF has great information on how to manage credit and also avoid situations where payday loan financing seems like a solution.
Despite the widespread trend of borrowing more than one loan in other states, the practice is common in Ohio. It doesn’t even make financial sense to take out several short term loans within a short period. This is often the main reason why borrowers default or declare bankruptcy. Borrowing cash from more than one service leaves you in a debt trap. We all know it’s very hard to escape from tough financial situations.
Many customers end up with online payday loans from past financial hardships. Some believe they can roll over their first loan to repay other expenses. Nothing is further from the truth. A borrower can fall into a trend of borrowing more to pay off high credit expenses. You end up missing your payment dates and the APR will increase. Lenders keep piling on you more late payment charges, and higher interest rates. Paying off a single cash advance by taking another is never the solution. Multiple loans are almost impossible to manage with the current economic hardships. They lead you into a borrowing cycle that is quite hard to come out of.
Reasons You Can’t Have Two Payday Loans At Once
There is also the possibility that taking out more than one loan can hurt your credit. Other lenders, including hundreds of banks in Ohio may have access to your loan history. Having a handful of payday loans in recent months can cause a problem when you need an urgent loan. The erratic behavior you showed with online loans may just show up from banks. You also must consider the facts of bank fees and terms and conditions. Payday lending activity is not often included in your credit report. But there are some specialty credit reporting firms that collect all your financial activities. Including the payday and installment loans you once took. Make sure you don’t take out more than one online advance and fail to pay back.
A payday loan company in Ohio debt to a debt collector and that can create problems with your credit report. You’ll have no control over what the debt collector will do with your unpaid loan, including reporting the debt to national credit bureaus. In any case, debt collection by itself hurts your credit score. Should you be sued for defaulting on online payday loans or installment loans and end up losing the case. In this situation, the loss shows in your credit score. Your best option would be to avoid going after multiple payday loan offers!