The State of Maine's Laws for Payday Loans

Learn the rules in Maine for payday loans.sign. loan sale image by L. Shat from Fotolia.com

Payday loans are a very popular way to get fast cash on short notice. A sudden need for cash, such as a car repair, makes these type of loans very attractive. However, there is a not so pleasant side to the convenience of a payday loan. There are usually high fees associated with these loans. In many cases, people have actually ended up with a significant amount of debt due to payday loans. For this reason, many states, such as Maine, have enacted very strict guidelines for payday loans.

Payday Loan Fees

Obtaining a payday loan in Maine can be quite difficult as it is one of the few states in the U.S. that has very strict regulations regarding this type of financial service. The payday loan companies that operate in Maine are subject to limitations in the amount of fees that they can charge consumers. In Maine, payday loan providers can charge $5 for loan amounts up to $75, $15 for loan amounts between $75 and $250, and $25 for loans above $250.

Maine law does not allow the cashing in or advancing of money on post-dated checks. This law has had a dampening effect on the cash advance business in Maine as most payday loan companies do require that consumers provide a post-dated check for a cash advance. This is a protective method established by Maine in an effort to keep consumers from incurring excessive fees and possibly closed accounts as a result of repeated attempts to collect money by the payday loan company.

Online loan companies are much harder to regulate than brick and mortar businesses as they have different methods of operation. Instead of requiring a post-dated check, the consumer must sign an agreement allowing the payday loan company to make debits against the account on a future date. It can be very difficult for a government entity to control these types of arrangements. For increased protection, it is recommended that individuals proceed with caution in regards to obtaining payday loans online.