Connecticut Payday Loans

Usury act applies or small loan act applies. Conn. Gen. Stat. §§ 36a-563 et seq.
Status: Prohibited

Payday lenders are currently prohibited by Connecticut law to operate within the state. Connecticut's usury law prohibits anyone from making loans at more than 12 percent interest without a license, effectively banning payday lenders from operating in this state. Any other lenders must possess a license to deposit checks into another person's account, and the state does set a minimum fee for cashing a post-dated check.

However, there have been legal challenges to these state regulations in recent years, the most prominent coming from out-of-state companies claiming tribal sovereignty. In January 2015, Hartford Business reported the state had halted attempts by an Oklahoma-based Native American tribe from offering high-interest loans through the internet, which opened up a debate on whether or not a Native American tribe would be required to follow consumer-lending laws.

The argument stems from what is called tribal sovereign immunity. In states where Native American tribes do business, businesses wholly owned and operated by Native Americans are not always subject to a state's consumer laws. As such, some businesses attempt to maneuver around state regulations by claiming to be owned or affiliated with a tribe.

What is a payday loan?

Usually defined as short-term loans geared toward emergency financial situations, payday loans are known for high interest rates, short repayment periods, and the relative ease of the application process.  The loans get their name from the relatively short time span between loan approval and the payback period, usually two weeks, that tend to coincide with the biweekly pay period commonly used by employers in the U.S.

To apply for a cash advance loan in states where they are legal, a potential borrower only needs to be over the age of 18, be a U.S. citizen, and have access to a bank account. Payday loans do not require any collateral from the borrower to apply, and the borrower's credit history and debt level do not come into play during the application process. The easy application process and complete freedom of borrower usage, however, can lead to large problems if the borrower does not respect the terms of the loan.

Other Loan Options

Thanks to a business model that works in a similar fashion to credit card companies, a Connecticut resident can search for loans online. This means a person in Connecticut can search, and apply, for a loan with a company operating in Florida and still legally accept and use the funds. In a way, this grants a potential borrower with a wider variety of financial options. A stand-alone lender operating out of a strip mall may only offer one set of lending terms, but online lenders could present the borrower with better loan options. The requirements for loan approval might be more rigorous, however, and the freedom to apply does not guarantee a loan offer will be accepted. Furthermore, a borrower should understand all the terms and conditions of an offered loan before accepting the terms. Also remember that this is a loan, and the funds will have to be paid back according to the agreed-upon terms.

Lending Rules*

Lenders in the state of Connecticut are legally required to comply by the following limitations according to Usury act applies or small loan act applies. Conn. Gen. Stat. §§ 36a-563 et seq.:

Small Loan Rate Cap:
30.03% APR or $17 per $100 up to $600; $11 per $100 up to $1,800; add-on interest
*The information displayed may not be current. For the most recent information, please visit http://www.paydayloaninfo.org/state-information/14.

Regulatory Information

If you have a complaint against a Connecticut Cash Advance location you can contact your state regulator below:

Regulator:
Connecticut Department of Banking
Address:
260 Constitution Plaza Hartford CT 06103
Phone:
(860) 240-8299
Fax:
(860) 240-8167
Website:


Connecticut Check Cashers

Below you can find Connecticut check cashers in the following cities:

Connecticut Statistics**

The following information is key demographic data for the state of Connecticut from the Census bureau.

Total Population:
3,576,452
Median Household Income:
$70,331
Poverty Rate:
10.5%
Median Gross Rent:
$1,075
High School Graduate or Higher:
89.9%
Bachelor's Degree or Higher:
37.6%
**The information displayed may not be current. For the most recent information, please visit http://www.census.gov/quickfacts.

Borrow Responsibly

Technology and the wealth of information available on loans and lending terms should make the process of loan applications easier for both the borrower and lender, but challenges remain. The primary responsibility of a borrower should be the responsible use of the requested funds and an abiding respect for the loan terms.  However, as short-term loans are best used to address unexpected financial situations, a borrower's fear and anxiety can prove to be challenging. The easy application process should not embolden a borrower into thinking such loans are easy solutions to financial difficulties. Short-term loans should never be used for long-term financial planning or anything other than an emergency situation. A borrower should also consider all other financial options available to them before committing to a cash advance loan.

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