Delaware Payday Advances

Posted on Thursday, September 10th, 2009 at 5:17 pm in Cash Loan Info by State

Delaware is known for its unusually liberal laws on company formation, corporate taxation and other financial transactions. Have you ever noticed how many credit card companies have their headquarters in Delaware, especially those that offer high-interest rate cards to people with poor credit? It should come as no surprise, then, that the tiny New England state allows payday lenders to charge whatever rates they like to customers.

Most payday loans in Delaware appear to come with a 15-20% interest rate per 14-day loan period, which is pretty average for the country as a whole. This would translate into an annualized percentage rate (APR) in the 390-520% range. Heavy competition among lenders in the state means that they have to keep rates down to industry-typical levels.

Provided you can fulfill all the basic requirements such as having an income of over $1,000 a month and being 18 or older, you can get a payday loan of up to $500, depending on how much you earn and whether you’re a repeat customer. You’re allowed to take out any number of payday advances at a time, but the total mustn’t exceed $1,000.

The maximum loan term is 60 days, although the fees are calculated on the basis of 14-day terms, as per the standard practice in the payday lending sector. You can roll over each loan up to four times, which means that you could hold a single payday loan for as long as 300 days, or close to 10 months. There’s no cooling-off period stipulated in Delaware’s payday lending code, so you could conceivably get another loan as soon as your current one can no longer be renewed. This opens up the real possibility that people could become virtually perpetual cash advance borrowers who are forever struggling to get themselves out of debt.

One unique feature of the application process for a payday loan in Delaware is that you have to provide your thumb print on the application form, as well as on the check you deposit with the lender when you apply at a lending store rather than online. This measure, which has been in place for several years, has helped to decrease the incidence of check fraud.

Although Delaware’s unemployment rate is a little bit lower than the national average, it has been rising in line with the rest of the country in the ongoing financial crisis. This has meant that the market for payday loans in the state has grown significantly. Borrowers tend to be low to middle-income earners, many of whom own their homes. Although most unemployed people can’t obtain payday loans unless they also receive income from another source such as social security, child maintenance or alimony, someone in their immediate family who still has a job can of course apply on behalf of the household. So if you’ve lost your job and need a payday loan, your spouse could get one in his or her name to supplement your joint finances.