Maryland Payday Loans

Consumer loan act applies. Md. Code Com. Law § 12-101 et seq.
Status: Prohibited

Payday Loan Laws in Maryland

As of February 2017, Maryland does not allow any payday loans within the state’s borders. Consumer loans, including personal loans and cash advances, are governed by the Maryland Office of the Commissioner of Financial Regulation. The state has set limits on the interest rate that lenders can charge their borrowers, which range from 24 percent to 33 percent. Anyone who believes they have witnessed payday lending services being offered in the state should contact the Office of the Commissioner of Financial Regulation.

In 2013, the Baltimore Sun reported federal regulators had started warning banks about online payday loans. The report stated the Federal Deposit Insurance Corporation had told banks in 2012 to monitor relationships with third-party payment processors that could be requesting withdrawals from customer accounts on behalf of payday lenders. The FDIC warned that the banks could be held liable for any fraudulent activity. The Sun also reported Maryland's division of financial regulation had received about 250 consumer complaints about payday loans a year since 2011.

What is a payday loan?

Payday loans are short-term loan types that are categorized for the relatively short repayment periods, typically within two weeks and coinciding with the standard two-week pay period. The loans are also known for high interest rates and the simple application requirements. 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.

Payday loans are also attractive due to the freedom of fund usage afforded to the borrowers. If a borrower went to a bank and sought a car loan, the request would usually be made in tandem to a car sale, thus tying the loan purpose off to the car loan. Payday loans carry no such requirement; a borrower can use the funds for anything they need.

This can create problems when the funds are used irresponsibly, though. The most common dangers are when a borrower falls behind on the repayments and is forced to take out new loans to pay off the old ones. Coupled with the fees and charges for doing this, a borrower can find themselves trapped in a debt cycle. It is there extremely important for a borrower to understand all loan terms and conditions before accepting the funds.

Other Loan Options

While the state has been cracking down on online loan searches, Maryland still allows residents to use online lenders. The process is allowed under similar business regulations employed for credit card lenders, in that a credit card bank can operate in one state and seek business throughout the country.

This also means a borrower potentially has the option of finding a better loan that one offered at a corner lending store. Using search terms and lending preferences, a borrower could wind up with a loan tailor-made for their needs and with an agreeable repayment window. However, a borrower should keep in mind that the loan will have to be repaid eventually, and should plan ahead to meet that responsibility should they choose to accept a loan.

Lending Rules*

Lenders in the state of Maryland are legally required to comply by the following limitations according to Consumer loan act applies. Md. Code Com. Law § 12-101 et seq.:

Small Loan Rate Cap:
2.75% per month; 33% per year.
*The information displayed may not be current. For the most recent information, please visit http://www.paydayloaninfo.org/state-information/28.

Regulatory Information

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

Regulator:
Maryland Commissioner of Financial Regulation
Address:
500 North Calvert Street Suite 402 Baltimore MD 21202
Phone:
(410) 230-6100
Fax:
(410) 333-3866
Website:


Maryland Check Cashers

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

Maryland Statistics**

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

Total Population:
6,016,447
Median Household Income:
$74,551
Poverty Rate:
9.7%
Median Gross Rent:
$1,230
High School Graduate or Higher:
89.4%
Bachelor's Degree or Higher:
37.9%
**The information displayed may not be current. For the most recent information, please visit http://www.census.gov/quickfacts.

Borrow Responsibly

The easy application process for short-term loans 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. However, given the unexpected situations that arise in life, a borrower may feel pressured to make a fast financial decision.

As stated above, though, the current prohibitions on cash advance lending in Maryland can be used to a borrower’s advantage if they take the time to shop around and understand the loan terms before accepting. This may seem like an unlikely indulgence to someone feeling desperate, but they should remember the full responsibility of the loan terms will be theirs if they agree to accept the loan.

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