(WTNH)– New rules are in place for people who take out so-called “payday loans.” We’re stretching your dollar with what you need to know.
Quick cash comes with some new rules this month but will not go into effect until July 2019. The Consumer Financial Protection Bureau issued new regulations for those high interest payday loans.
These new rules are set to help protect people from being trapped into a cycle of debt. Here’s what you need to know.
Payday loans provide money for unexpected expenses. Usually, loans must be paid back by the borrower’s next paycheck.
These rules will also apply to car title loans and longer-term loans with balloon payments.
Under these new rules, lenders will now be required to do basic background checks on loan recipients for income, living expenses, and major financial obligations.
Special rules are in place for loans under $500 that exempt borrowers from going through the entire vetting process.
However, lenders will be required to temporarily cut people off if they take out three payday loans in “quick succession.”