1. What is a
deferred presentment and small loans?
These loans may go
by different names such as: cash advance, check advance, deferred deposit
check loans, deferred presentment or small loans. A payday loan is a
short-term personal loan secured by a borrower’s personal check or the
borrower’s agreement to have the money owed taken out of their bank or
credit union account at some future date (usually 14 days after making the
2. What is the
most I can borrow?
Louisiana Deferred Presentment and Small Loan Act, the maximum amount that
you can borrow is $350.
3. What is the
most I can be charged for a payday loan?
allows a lender to charge $20 for every $100 borrowed, plus a $10
documentation fee. However, the total amount of the fees cannot exceed
$55 when the amount borrowed is $220 - $350.
4. Can I renew
or refinance my payday loan?
No. You must
completely pay off the payday loan before you can make another loan.
However, if you pay the fees and repay 25% of the amount you borrowed, you
can refinance the remaining 75% of the amount you initially borrowed, but
you will be charged additional fees based on the remaining balance owed.
For example, if you borrowed $100 with $25 in fees and you cannot repay
the entire amount on the due date, you can pay the $25 fees plus an
additional $25 (25% of $100) for a total of $50 and refinance $75 (75% of
$100). The additional fees to refinance the remaining balance of $75
would be $20.
5. What happens
if I can not repay my payday loan when it is due or pay the 25% plus the
Before the due
date on the loan, the lender is required to accept a partial payment of
$50 or more and apply the payment to the outstanding balance on the loan.
On or after the due date, the lender can take legal steps to collect the
6. Can a lender
charge me more money if I can not repay my payday loan on time?
Yes. The lender
may charge you 36% per annum for one year after the due date and 18% per
7. Can a lender
deposit my personal check that they are holding if I do not have enough
money in my account to cover the full amount of the check?
Yes. If the
lender deposits your check and it is returned unpaid by the bank, the
lender can charge you an additional $25 NSF check fee and is entitled to
be reimbursed the fee (usually $2-$3) that the lender’s bank charges for
processing the NSF check.
8. Can I have
more than one payday loan outstanding at the same time?
Yes. However, it
is not a good idea to make one loan to pay off another and may cause
additional financial hardship. If the first loan did not resolve your
financial difficulties, a second loan will likely make things more
difficult. The more payday loans you have outstanding, the harder it will
be to pay them off completely.
Payday loans are not intended to meet your long-term financial needs. The
long-term use of payday loans may cause financial hardship.
(This document is
intended to comply with the directives of HCR 137 from the 2009 Regular