New Jersey Payday Loan Laws and Regulations

New Jersey Payday Loan Laws and Regulations

Are Payday Loans Legal in New Jersey?

Short-term Payday Loans in New Jersey are available but with certain restrictions imposed by Consumer loan act, N.J. Stat. Ann. tit. 17, 1 et seq., N.J. Stat. Ann. 2C: 21-19., and N.J. Stat. Ann. 17:15A-47.. The Payday Lending legislation covers all the parts of the process concerning:

  • Payday Loan amounts
  • Payday Loan repayment terms
  • Payday Loan online direct lenders
  • Payday Loan stores near you
  • Payday Loan interest rates and other fees
  • Payday Loan collecting practices
  • Payday Loan default penalties
  • The number of outstanding Payday Loans as well as a cooling-off period in-between etc.


Why are Payday Loans restricted in New Jersey? 

The Government considers Payday Loans too expensive and often associated with lenders’ predatory practices. That’s why in New Jersey Payday Loans have been strongly regulated since 1993 when The Check Cashers Regulatory Act prohibited check cashers to cash or advance money on a postdated check. And the APR was capped at 30.00%. It caused most lenders to stop issuing short-term small-dollar loans as it became not profitable. Still, there still exist some banks and online companies offering similar types of cash advance suitable to cover any unexpected emergencies.

New Jersey Payday Loan laws 

The legal documents regulating Payday Loans in New Jersey are Consumer loan act, N.J. Stat. Ann. tit. 17, 1 et seq., N.J. Stat. Ann. 2C: 21-19., and N.J. Stat. Ann. 17:15A-47.

Besides, it’s necessary to keep in mind that even if you qualify for a loan it doesn’t mean you get one. Don’t forget about the interest rate restrictions in New Jersey state. 

However, there are no limits on the purpose of loan usage. Any urgent expenses, unforeseen bills, car repair, home repair, etc. may seem a sound reason to apply for an online Payday Loan in New Jersey.

If you haven’t succeeded in finding the necessary cash advance, there are always other options to receive the necessary funds in New Jersey:

  • unsecured Installment Loans,
  • bad credit Personal Loans,
  • Title Loans,
  • Pawn Shops, etc.

New Jersey Payday Loans online laws 

Cash advances (payday loans) from both storefront and online lenders are restricted by 30.00% APR usuary cap by Consumer loan act, N.J. Stat. Ann. tit. 17, 1 et seq., N.J. Stat. Ann. 2C: 21-19., and N.J. Stat. Ann. 17:15A-47.. It also concerns online lenders which must operate in accordance with all relevant state and federal laws. Otherwise, they may be liable to New Jersey Department of Banking and Insurance, 20 West State St. Trenton NJ 08625 for law violations. 

The law obligates New Jersey Payday Loan lenders to provide you with a written disclosure of all the rates and fees in the understandable language. You should read them carefully and if you agree to acknowledge the notification by signing the contract.

Does New Jersey law allow Payday Loans for bad credit borrowers? 

The average credit score in New Jersey is 686, placing it in the fair range. But it doesn’t mean that those who have a worse credit can’t apply for the necessary cash advance in New Jersey. 

  • First of all, there’re some companies in New Jersey providing similar to Payday loan services to borrowers with both good and bad credit score.
  • Secondly, you can always find a cosigner to increase your chances of being approved for a bad credit Payday Loan.
  • Find out how to improve your credit score and do your best to do it fast. 
  • Or consider taking out a bad credit Installment Loan, or bad credit Personal Loan.

New Jersey Payday Loans news  – latest changes

The New Jersey ability-to-repay principle of regulating Payday Loans is now under attack, as the CFPB under the Trump administration, acting in payday lenders’ interest, moves to undo protections built on 5 years of research, data collection, field hearings, and public comments, even though no new evidence supporting repealing the rule has come to light.

Payday lenders have been trying to find loopholes in the state’s laws for centuries. State usury caps prevent this exploitation. The rate cap also ensures that borrowers are protected against the harms of these high-cost loans regardless of whether they are structured as short-term or long-term loans.

New Jersey Payday Loans historical background 

1993 It was prohibited to cash post-dated checks.
2006 Military Payday Loans were capped at 36% interest rate.
2013 Payday lending was prohibited by llimiting interest rates at 30%.
June 2, 2016 A Payday Loan Rule was proposed but still under consideration.

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