Payday Loan Laws NC

Currently in the State of North Carolina, it is illegal to operate a payday loan service. Under state law, payday loans, cash advance loans, or short term loans are not legal. Businesses that operate within state borders are not allowed to offer this service.

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From 1997 to 2001, North Carolina allowed this type of loan to be processed within the state. However, since 2001, when the initial law lapsed, state legislators have refused to renew the payday loan law.

What Can North Carolina Residents Do When They Are In Need Of Cash?

At this time, payday loans in NC may be illegal by businesses operating within the state lines, but they are not illegal online. Online payday lenders have the ability to operate within the state lines of North Carolina if their company is not based within the state.

This is much like a credit card offer. People who live in North Carolina receive credit card offers from out of state banks all the time. In fact, people around the country continually receive these offers. It is completely legitimate for a bank based in Delaware to offer a credit card to someone in another state. The same rules are applied to cash advances online.

If the cash advance company has the legal authority to conduct a payday loan business, they can offer their services to residents of North Carolina without breaking any laws.

Using An Online Cash Advance Service In North Carolina

If you are a resident of North Carolina and need access to a payday loan, you will need to go online to find a lender. One of the first things that you should do when you are examining the different companies offering these loans is find out if they are allowed to offer loans in your state. Some lenders only target specific areas or regions of the country.

Once you have established that they offer loans in North Carolina, all you will need to do is follow their application process. Application requirements may differ from lender to lender as do the repayment terms. Make sure that you are familiar with all of this information before accepting a loan.

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Can I Go To Jail For Using An Online Cash Advance Service In North Carolina?

The Department of Justice in North Carolina acknowledges that online payday loans are not illegal at this time in the state. Since state law can only apply to businesses operated within the state, law enforcement cannot look at accepting one of these online loans as a crime.

The Department of Justice, however, has issued a statement that it is aggressively seeking ways to eliminate this loophole in the law. They are trying to enact laws that will prevent the use of payday loans through Internet sites. This is a very tough battle for them because their laws could not apply to foreign companies or sites owned and operated by Indian tribes. As for now, the State simply is ignoring the issue.

Payday Loan Responsibility

The largest reason that the State of North Carolina has made cash advances illegal is because of the potential for abuse of these services. Some people exceeded their ability to repay these loans and accumulated excessive debts. These few people have made it difficult for other state residents to have quick access to cash during their time of need.

It is important for anyone who uses these services to remember that these are short term loans:

  • Payday advance loans must be repaid on the next pay date of the borrower.
  • The loans must be paid in full plus fees at that time.
  • Failure to repay these loans could result in escalating debt.

There are rules in place that allow these loans to be extended. However, there are fees associated with extensions and additional time limits are put into place. Borrowers must be able to repay these loans within this time period.

Payday loans are a very useful financial tool to use when necessary. Unexpected car repairs, school projects, or medical bills can cause financial nightmares without this type of service. The best thing that any borrower can do is use this type of financial service responsibly and make sure that the debt is repaid on time.