While more and more states are enacting payday loan legislation in today’s world, Oklahoma set forth clear terms with regard to payday lending in 2004 with Senate Bill 1565. The specifics of Oklahoma’s payday lending law provide protections for both lenders and consumers; however, they do also create limits on online payday lending options in the state. The Oklahoma Deferred Presentment Service Act required all payday lenders in the state to be licensed. Both the licensing regulations and the specific loan conditions make payday loans in Oklahoma a face to face affair. The law also established a fund to help provide credit counseling services, paid for by a five cent additional fee on each payday loan.
What are the legalities of payday loans in Oklahoma? There is a set maximum loan amount of $500, and the lender is banned from splitting the loan into two to charge interest on both portions of the loan amount. Loan terms can range from 12 to 45 days. Borrowers may not extend a payday loan, or roll the loan over into a new loan. Lenders are required to check a database to determine whether the customer currently has an outstanding payday loan.
Oklahoma payday lending law also specifies that after taking out three consecutive payday loans, borrower can repay their loan in four equal installments. If a borrower chooses to use this option, they cannot take out another payday loan during the term of the repayment or for 15 days thereafter. This strategy enables borrowers to get out of a cycle of debt in a reasonable way, thanks to new legal protections. Furthermore, a cooling off period after five consecutive loans has been put in place.
The law in Oklahoma also serves to create specific limits with regard to interest and finance charges. Payday loans cannot exceed 390% interest, and fees are limited to $15.00 per $100.00 for the first $300.00 borrowed, and $10.00 per $100.00 borrowed thereafter. Borrowers should be aware that the high costs of payday loans make them an overall poor choice in most situations.
If offered an online payday loan in Oklahoma, you should be aware that the lender is located elsewhere and relying on the laws of their jurisdiction for the loan. You may not have the protections available under Oklahoma law should you choose to rely on an online payday lender outside of Oklahoma.