Yes, currently payday loans are legal and available for residents of Ohio. Ohio has had a long history with these loans and regulations have changed throughout the years. The current rules for these loan options try to provide the most protection for its borrowers. Currently in Ohio you cannot borrow more than $1,000 from a payday loan with a maximum APR (the annual or total interest rate) capped at 28%. The minimum amount of time that borrowers will get to repay their loan is 91 days and the maximum being one year. There are no rollovers allowed, finance charges are limited to 10% or $30, whichever amount is the lower of the two.
Ohio is one of the most regulated states with payday loans, having specific rules related to costs. For example, Ohio payday loan lenders are required to make sure that the total cost of the loan, including interest and all fees must not exceed 60% of the principal loan amount. Or take this rule about origination fees, where Ohio law states that origination fees cannot go over 2% of the loan balance. Compared to the past average APR of 591%, you can see that payday loan legislation has come a long way in this state.
Even with interest caps and fee limitations, you may not know about all the costs until you read the fine print. And in the end you may end up paying the maximum amount allowed in the state!
Many people who take out these loans may find that they tend to be way more expensive than had anticipated but at that point it will be too late to stop repayment. There is no reason for you to turn to payday loans for funding. Even bad credit borrowers may be able to find a more affordable, flexible, and manageable loan option in Ohio.
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