Generally, payday loans are prohibited in Pennsylvania State. Having said that, this lending business is still thriving online.

Read the following guide to know the ins and outs of payday lending in this state.

History of Pennsylvania Payday Loans
pennsylvania pauday loansLenders who are still providing cash advances to consumers are doing it within the restrictions of the law. In 1998, http://usapaydayloans.info/pennsylvania/philadelphia/ a law was passed in the state that prohibited check-cashing firms from issuing loans based on postdated checks.

This rule basically applies to payday lenders even though they are not check-cashing companies. Payday loans basically revolve around a consumer’s paycheck. The borrower writes a postdated check when he signs an agreement authorizing the lender to withdraw paycheck funds from a bank account.

Pennsylvania Interest Rate: Rules
There are limits to how much interest a lender might charge a borrower. It is the responsibility of The Consumer Discount Company Act to regulate such interest rates. Just like most states, Pennsylvania has its own set of interest rate limitations, which include the following:

Small loan lenders are not allowed to charge more than 6% interest on short-term loans;
Some lenders may charge up to 24% interest but will first have to obtain licensure.
The strict rules were implemented to curb these lending companies from charging exorbitant rates. The average interest rate is approximately 300%. Some may even go up to 600%.