A Guide to Online Payday Loan Lending Legislation in Utah

While the economy has improved for mainly affluent individuals, many middle class Utah families are still struggling to pay bills. Conventional banks have tightened their lending policies and have denied loans to people with poor credit. That's why many people who are short of cash seek an online payday loan in Utah.

How Online Payday Loans in Utah Work

A payday loan is designed to give you quick access to a cash advance without the hassle of a credit check. It's a short-term loan that is expected to be repaid by your next paycheck. So it's meant for people who need cash in between paychecks, but not for people in between jobs. In fact, proof of employment is one of the few requirements you will have to meet, along with having an active checking account with a bank or credit union.

Keep in mind that Utah law forbids such loans to extend beyond ten weeks. As long as you repay the loan quickly you will not have to worry about the higher interest rate or late fees. The terms, by law, must be disclosed verbally and in writing.

Choosing Your Payday Lender

It's important to make sure that the Department of Financial Institutions, which enforces state lending laws, has your payday lender on file as a registrant. Since there are many payday lenders to choose from, find the one that best accommodates your financial needs. Some payday lenders require your banking information so that they can electronically debit your account on your next payday. Others require a postdated check that they can cash on the due date of your contract.

After shopping around for lenders that meet your criteria, read the contract thoroughly and then ask questions about anything you don't understand. Do not just sign the contract without having a complete understanding of all the terms and your responsibilities. Remember that all payday lenders must meet requirements of Regulation Z of the federal Truth-in-Lending Act. Make sure you are aware of the annual percentage rate (APR) and whatever late fees and penalties may apply before entering an online payday loan in Utah.