Is bankruptcy right for you?Book a consultation

Call (937) 401-5000

Cope Law Offices, LLC

Ohio Bankruptcy Attorneys

Last Updated on By

How Do Payday Loans Work in Ohio? Can Bankruptcy Help?

Ohio Payday Loans Bankruptcy Help

Last updated Oct. 20, 2018.

If you’ve ever run into a sudden, unexpected expense, you may have considered taking out a payday loan. Payday loans go by a variety of names, such as cash advance, payday advance, or deposit advance, but they all amount to the same thing: a quick and easy way to get that much-needed cash in order to survive financially for another day.

However, payday loans can lead to further financial hardships that extend well beyond your initial need for cash. Payday lenders often prey on consumers with usurious rates of interest. To help you understand just what you’re getting yourself into when you take out an Ohio payday loan, this article explains the truth about payday advances.

How Do Ohio Payday Loans Work?

The typical payday loan is for a relatively small amount of money, but requires you to pay a high interest rate. Say, for example, you need to borrow $100. To secure the $100, you will be required to write a check for $115 that the lender will cash when you have the money in your checking account. You will agree to pay the $115 in a set period of time, usually a week or two.

The scenario above is hypothetical. The typical interest rate for a two-week payday loan is anywhere between 15% and 30%. The example above is calculated with a 15% interest rate.

But that’s the 2-week interest rate. Spread that percentage out over a year, and you get the Annual Percentage Rate (APR). The Federal Trade Commission (FTC) estimates that the APR for a payday loan often approaches 390% or higher. This is not such a good deal. For most bank loans, the APR will not exceed 18%.

Even in Ohio, where state law supposedly limits interest rates and fees for Ohio payday loans, lenders relying on a loophole in the law still charge APRs of up to 600% or more.

Hence, payday loans—including Ohio payday loans—are something that should be avoided whenever possible.

What Happens if I Do Not Pay Back My Ohio Payday Loans on Time?

Failing to pay back on time is where most people run into trouble with Ohio payday loans. If you can’t pay back, then you might elect to extend the loan through a “roll over,” which means you must pay another fee. Hence, in the above example, you would probably have to pay an additional $15 to extend the $100 loan for another 2 weeks.

Assuming you can get the money to pay back your extended loan, you have now paid $130 in order to get a $100 loan.

Unfortunately, studies have shown that 99% people who take out one payday loan will take out at least one more in the course of a year. This means that the fees keep adding up, and that these borrowers are paying significantly more than they can afford to obtain the cash that they need.

Thus, you are merely digging yourself a deeper hole. If this trend continues, the lender can take legal action—that is, the payday lender can sue you and take whatever property of yours is necessary to satisfy your debt. If you are unable to pay back a payday loan, and the lender has threatened to take legal action, you should speak with an attorney.

Are Ohio Payday Loans Safe? What About From My Bank?

Not always. The FTC has stated that many payday lenders engage in illegal lending and debt collection practices. The FTC reports:

Some collectors harass and threaten consumers, demand larger payments than the law allows, refuse to verify disputed debts, and disclose debts to consumers’ employers, co-workers, family members, and friends. Debt collection abuses cause harms that financially vulnerable consumers can ill afford. Many consumers pay collectors money they do not owe and fall deeper into debt, while others suffer invasions of their privacy, job loss, and domestic instability.

Thus, if you are being hounded about an outstanding debt by a payday lender that has used any such tactics, you should speak with an attorney to know your rights.

If you’re thinking of taking out a payday loan from your bank, you should see what sort of fees your bank charges first. If you are going to take out a payday loan, it’s worth shopping around for the best deal. However, banks aren’t likely to offer much better deals.

In fact, if you take out a loan from your bank, then your bank may be able to take the money you owe directly out of your accounts, leaving you nothing for other expenses.

Ohio Payday Loans Should be a Last Resort

If possible, avoid taking out a payday loan, and do whatever you can to avoid taking out more in the future. Do whatever possible to improve your credit rating. That way, you might be able to secure a bank loan at a much more manageable interest rate. Moreover, you should consider taking out a credit advance loan from your credit card company if it offers a better interest rate.

Basically, if you’re short on cash, explore all of your options to be sure you’re not overpaying.

Can You File Bankruptcy on Payday Loans?

Finally, if you’re struggling with debt—whether Ohio payday loans, credit cards, or otherwise—consider bankruptcy. Although not every type of debt is discharged in a bankruptcy filing, payday loans can be. Because Ohio payday loans are an unsecured debt, they can be eliminated by filing for Chapter 7 bankruptcy.

If you’re seriously indebted to a payday lender and live in Southern Ohio, we’ll be happy to review your case free of charge. To schedule a free initial consultation with an experienced Dayton bankruptcy lawyer, call 937-401-5000 or contact us online.

See also: Will I Be Able to Get Credit After Bankruptcy?

About Russ Cope

Russ B. Cope is dedicated to legal standards that go far beyond filing cases — he is interested in your goals. Russ wants to be certain that each client is making an informed decision that will make their life better, and thrives on the interaction between lawyer and client.

Reader Interactions

Comments

  2. Payday Loans Jackson says

    Does your blog have a contact page? I’m haing problems locating it but, I’d like to ssnd you an e-mail.
    I’ve got some creative ideas for yiur blog yyou might be interested in hearing.
    Either way, great blog and I look forward to seeing it expand
    over time.

    My web page; Payday Loans Jackson

  3. mitolyn says

    **mitolyn**

    Mitolyn is a carefully developed, plant-based formula created to help support metabolic efficiency and encourage healthy, lasting weight management.

  10. AL says

    Woww that was odd. I just wrote an incredibly long commenmt but after I clicked
    submit my comment didn’t appear. Grrrr… well I’m not writing all tha over again.
    Anyway, just wanted to say superb blog!

    My homepage :: AL

  14. бнанс says

    Thank you for your sharing. I am worried that I lack creative ideas. It is your article that makes me full of hope. Thank you. But, I have a question, can you help me?

  18. binance says

    Thank you for your sharing. I am worried that I lack creative ideas. It is your article that makes me full of hope. Thank you. But, I have a question, can you help me?

  30. cse.google.ac says

    References:

    Casino joe pesci http://cse.google.ac/url?sa=t&url=http%3A%2F%2Frusnor.org%2Fbitrix%2Fredirect.php%3Fevent1%3D%26event2%3D%26event3%3D%26goto%3Dhttps%3A%2F%2Fde.trustpilot.com%2Freview%2Fowowear.de

  63. http://kartinki.net/a/redir/?url=http://www.ntis.gov/external_link_landing_page.xhtml?url=https://de.trustpilot.com/review/der-wikinger-shop.de</a says

    References:

    Legiano Casino Auszahlung Dauer http://kartinki.net/a/redir/?url=http://www.ntis.gov/external_link_landing_page.xhtml?url=https://de.trustpilot.com/review/der-wikinger-shop.dehttp://kartinki.net/a/redir/?url=http://www.ntis.gov/external_link_landing_page.xhtml?url=https://de.trustpilot.com/review/der-wikinger-shop.de</a

  137. https://tn.nova.cz/zpravodajstvi/galerie/28440-utoky-v-mariupolu-a-okoli/a396bc8e-4895-4e7f-85f7-ee7677bbb517?back_url=https://voffice.lawyers.bh/warnercorkill1</a says

    References:

    Hitnspin casino ohne anmeldung https://tn.nova.cz/zpravodajstvi/galerie/28440-utoky-v-mariupolu-a-okoli/a396bc8e-4895-4e7f-85f7-ee7677bbb517?back_url=https://voffice.lawyers.bh/warnercorkill1https://tn.nova.cz/zpravodajstvi/galerie/28440-utoky-v-mariupolu-a-okoli/a396bc8e-4895-4e7f-85f7-ee7677bbb517?back_url=https://voffice.lawyers.bh/warnercorkill1</a

  153. social issues news says

    Thank you for the auspicious writeup. It
    in fact was a amusement account it. Look advanced to far
    added agreeable from you! By the way, how can we communicate?

  154. เย็ดสบัด says

    I will immediately grab your rss feed as I can’t to
    find your email subscription hyperlink or newsletter service.
    Do you have any? Please let me recognize so that I may
    subscribe. Thanks.

  157. GCC says

    Hi! I could have sworn I’ve been to this web site before but after going through some of the
    articles I realized it’s new to me. Regardless, I’m
    certainly delighted I discovered it and I’ll be book-marking it and checking back frequently!

  158. source says

    Hey would you mind sharing which blog platform you’re using?
    I’m planning to start my own blog soon but I’m having a difficult time choosing between BlogEngine/Wordpress/B2evolution and Drupal.
    The reason I ask is because your layout seems different
    then most blogs and I’m looking for something completely unique.
    P.S Sorry for getting off-topic but I had to ask!

  159. Extra resources says

    Right here is the right site for anyone who would like to find out about this topic.
    You realize a whole lot its almost tough to argue with you (not that I personally would want
    to…HaHa). You certainly put a new spin on a topic
    that has been written about for a long time. Wonderful stuff, just wonderful!

  160. More about the author says

    Wow, amazing weblog layout! How lengthy have you ever
    been blogging for? you make running a blog look easy.
    The entire glance of your site is fantastic, as smartly as the
    content!

  161. More about the author says

    I’m not sure exactly why but this weblog is loading extremely slow for me.

    Is anyone else having this issue or is it a issue on my end?
    I’ll check back later on and see if the problem still exists.

  162. check my site says

    This is really attention-grabbing, You are an excessively professional blogger.

    I’ve joined your rss feed and stay up for
    in quest of more of your excellent post. Additionally, I’ve shared your web site in my social networks

  163. Visit Website says

    Hi there! This article could not be written any better!
    Looking through this article reminds me of my
    previous roommate! He continually kept talking
    about this. I most certainly will send this article to
    him. Pretty sure he will have a good read.
    Thanks for sharing!

  165. Homepage says

    Hey! Someone in my Myspace group shared this site with us so I came to look it
    over. I’m definitely enjoying the information. I’m book-marking and will be tweeting this to my followers!
    Superb blog and outstanding style and design.

  167. bokep online says

    Heya i am for the primary time here. I found this board and I to
    find It really useful & it helped me out much.
    I’m hoping to present one thing again and
    aid others such as you aided me.

Leave a Reply

Your email address will not be published. Required fields are marked *