North Carolina is a state in which payday loans are illegal. Payday lending has been effectively banned throughout the state of North Carolina. Certain other installment loans are still available for individuals in need of funding in North Carolina. The payday lending industry is heavily regulated state by state. There are many states where payday loans are still legal and restricted or controlled to varying degrees. We recommend that borrowers always look up and review thoroughly the laws and regulations for their state in particular, as no state is exactly the same.
Payday loans are a special kind of short-term loan used by borrowers to cover expenses until their next paycheck comes through. They can be incredibly helpful for some individuals who need money quickly and may not qualify for other kinds of funding because of their credit score. However, the high annual percentage rates (APRs) and short repayment periods make them very high in cost and difficult to repay on time.
Typically, payday loans need to be repaid in one large lump sum by the borrower’s next paycheck. The interest on top of the Loan balance can cause borrowers to incur late fees and other charges. The payday lending industry is so highly regulated because their high-cost and short-term nature make rollover common. Rollovers on high interest debt can lead unprepared borrowers into a debt trap that is extremely difficult to get out of.
To prevent this and any predatory lending practices, state governments place laws and regulations on payday lending and products with some states outlawing them altogether like North Carolina. However, there are still states where Advance payday loans are legal and only minorly restricted in regards to the interest rates that lenders are allowed to charge.
Fortunately, for those in need of some extra cash in North Carolina, there are other options available. We recommend exploring all your options including borrowing from a family member, personal installment loans, or visiting a credit union. Take every possible solution into consideration before making any big financial decisions that could impact your future.
Popular Questions