Payday Loans are NOT Legal in North Carolina

Beware of predatory lending

Payday Lenders in North Carolina

Payday loans, often marketed as quick and convenient solutions, are short-term loans typically due on the borrower’s next payday, designed to bridge financial gaps between paychecks.

However, payday loans often come with high interest rates and fees, making them costly options that can trap borrowers in a cycle of debt if not repaid in full by the due date. In the state of North Carolina, these loans have been deemed illegal since 2001 under the North Carolina General Statutes Chapter 53, which explicitly prohibits payday lending. This regulation aims to protect consumers from the cycle of debt often associated with payday loans, safeguarding them from exorbitant interest rates that can reach an average annual percentage rate of 400%.

Residents of North Carolina must remain vigilant and cautious, particularly when dealing with online lenders who may attempt to exploit their financial vulnerability. Predatory online lenders, in particular, pose a significant threat as they often engage in fraudulent practices. To protect themselves, borrowers should carefully scrutinize online lenders, verify their legitimacy, read the terms and conditions thoroughly, and refrain from sharing sensitive personal and financial information. By staying informed and vigilant, individuals in North Carolina can safeguard their financial well-being and avoid falling victim to predatory online lending scams.

Payday Loan Laws

The North Carolina General Statutes Chapter 53, Section 276A explicitly prohibits payday lending activities in the state. This regulation makes it unlawful for any lender to offer payday loans, imposing strict limitations on small-dollar loans with high interest rates and short repayment terms. The law aims to protect consumers from the predatory practices associated with payday loans, recognizing the potential harm they can inflict on vulnerable individuals.

Loan Terms and Conditions

prohibited

Whenever you need emergency financing, you can get loans online from a legit lending companies. Check your rates and terms before applying for cash advance online.

History of North Carolina Payday Loans

In the history of payday loans in North Carolina, significant legislative changes shaped the landscape of the industry. In 1997, the first legislation concerning payday lending was passed, and by 1999, payday lending became legal in the state. However, this status was short-lived, as the law expired in 2001. In 2001, the General Assembly passed a law that banned all payday loan businesses. Although the ban was established, it took time to eradicate illegal lenders operating in the state. Progress was made as numerous lenders were held accountable and faced convictions for their harassing actions towards borrowers. In 2015, online lenders became a pressing issue, as their operations technically fell within the bounds of the law. However, the North Carolina Business Court intervened by banning several companies from operating in the state, canceling existing loans, and implementing other legal measures to protect consumers. In 2018, there was an unsuccessful attempt to pass a bill that would have allowed payday lending under the condition of a small loan cap.

State Resources

How to file a complaint

The Consumer Protection section of the North Carolina Department of Justice accepts complaints through their online portal. They will review all complaints for compliance with the laws regarding consumer lending and borrowers can check the status of their complaint via the portal. Paper complaints can also be mailed to their office.

North Carolina Loan Debt Relief

How to Get out of Loan Debt?

To overcome loan debt in North Carolina, a well-thought-out approach and meticulous financial planning are essential. Start by assessing your current financial situation, examining your income, expenses, and outstanding debts. Develop a practical budget that prioritizes debt repayment while trimming unnecessary expenses. Engaging with your lenders to negotiate new repayment terms, such as extended payment plans or reduced interest rates, can also be beneficial. Exploring debt consolidation options can help streamline multiple debts into a single manageable payment. Seeking guidance from credit counseling agencies or financial advisors is recommended to gain expert insight into effective debt management strategies. Lastly, focus on cultivating responsible spending habits, establishing an emergency fund, and avoiding further debt accumulation. With determination and proactive measures, achieving financial stability and overcoming loan debt in North Carolina is attainable.

Support Resources

Types of Quick Loans in North Carolina

Payday Alternative Loans Payday Alternative Loans (PALs) in North Carolina serve as a reliable safety net for individuals seeking a responsible alternative to conventional payday loans. These borrower-friendly loans, available through select credit unions, provide small, short-term funding with favorable terms and lower interest rates. PALs in North Carolina are designed to protect borrowers from the predatory practices commonly associated with payday lending, offering increased flexibility and enhanced protection.

Installment Loans Installment loans in North Carolina offer borrowers the convenience of repaying their debts through manageable installments, with interest rates determined based on individual creditworthiness. Whether it's consolidating debts, covering unexpected home repairs, or handling other unforeseen expenses, installment loans provide a more affordable borrowing option with extended repayment terms and lower interest rates. This enables borrowers in North Carolina to achieve greater financial flexibility while effectively managing their financial obligations.

Lines of Credit Lines of credit in North Carolina allow residents to access funds up to a predetermined credit limit, providing them with the freedom to borrow and repay as needed within the approved limit. Unlike traditional loans, lines of credit typically do not require collateral, making them unsecured borrowing options. While lines of credit may undergo a credit review and carry slightly higher interest rates compared to secured loans, they offer a flexible and convenient solution for efficiently managing various financial needs. In North Carolina, lines of credit empower individuals to address their financial requirements promptly and effectively, providing a valuable resource for managing their financial affairs.

Alternatives to Payday Loans in North Carolina

Personal Loans

Personal loans are a popular choice among borrowers in North Carolina, offering unsecured financing for various purposes such as home improvements, debt consolidation, and unexpected expenses. They have fixed interest rates and predictable monthly payments. Lenders in North Carolina may provide more favorable terms and lower interest rates to borrowers with excellent credit, while individuals with poor credit may face higher interest rates and stricter eligibility criteria.

Bridge Loans

Bridge loans serve as a short-term financing solution for many individuals in North Carolina who are looking to purchase a new property while still owning their current one. These loans are particularly useful when conventional loans are not readily available or when borrowers need immediate access to funds. Lenders typically require an equity interest in the property and may limit the loan-to-value ratio to around 80%. To qualify for a bridge loan, borrowers must demonstrate their ability to close the sale or secure a conventional loan within a specific timeframe, typically four months or less. Bridge loans, categorized as specialty financing, are intended to be repaid within a relatively short period, usually ranging from one to three years.

Home Equity Loans

Home equity loans in North Carolina enable homeowners to leverage the equity in their properties to access funds. These secured loans come with a fixed interest rate and predetermined repayment period, utilizing the home as collateral. Home equity loans can be utilized for various purposes, such as covering unexpected expenses, consolidating debt, or making home improvements. While they may offer potential tax benefits, it's important to note that defaulting on these loans could result in foreclosure if repayment obligations are not met.

Bad Credit Loans in North Carolina

Individuals in North Carolina with poor credit or limited credit history may have access to bad credit loans, which are tailored to high-risk borrowers. These loans typically come with higher interest rates and additional fees compared to traditional loans. Collateral or a co-signer may be required to mitigate the higher risk associated with these borrowers. Despite the challenges, bad credit loans can be utilized for debt consolidation, home repairs, or unexpected expenses, providing an opportunity to rebuild creditworthiness over time.

North Carolina Small Business Loans

Small business loan options in North Carolina:

SBA loans: The SBA offers a variety of loan programs, including 7(a) loans, 504 loans, and microloans, to help small businesses access funding for things like, such as working capital, equipment purchases, and real estate investments.
Golden LEAF Foundation: The Golden LEAF Foundation offers various loan programs and grants to support economic development and job creation in rural and economically distressed areas of North Carolina.
North Carolina Rural Center Loan Programs: The North Carolina Rural Center offers various loan programs, such as the Small Business Loan Program and Microenterprise Loan Program, specifically designed to support businesses in rural areas of the state.
Business Lines of Credit: Lines of credit provide businesses with a revolving credit line that can be used as needed. They offer flexibility and convenience, allowing businesses to access funds whenever necessary and repay only the amount used.
Equipment Financing: Equipment financing enables businesses to purchase or lease equipment required for their operations. Lenders provide funding specifically for equipment, using the equipment itself as collateral.

VA loans in North Carolina

VA loans are a valuable financing option available to veterans and active-duty service members in North Carolina. These loans, guaranteed by the U.S. Department of Veterans Affairs, are offered by private lenders and come with various advantages. VA loans often require little to no down payment, making homeownership more attainable for those who may face financial constraints. They also typically do not require mortgage insurance and often come with lower interest rates. The flexible credit requirements of VA loans enhance eligibility for veterans and active-duty service members, ensuring accessibility to financing opportunities.

North Carolina Student Loans

Many options are available to North Carolina students to help finance their college education. These options include:

Federal Student Loans: Low-interest loans backed by the federal government that can be used to pay for education expenses.
North Carolina State Education Assistance Authority (NCSEAA): NCSEAA offers various state-sponsored student loan programs, including the North Carolina Student Assist Loan (NC Student Assist) and the North Carolina Parent Assist Loan (NC Parent Assist).
College Foundation, Inc. (CFI): CFI is a nonprofit organization that provides student loans and resources to North Carolina students and families. They offer the NC Parent Loan for undergraduate and graduate students, as well as private loan options.
Private Student Loans: Loans offered by private lenders that can be used to pay for education expenses, with interest rates and terms that can vary widely.

North Carolina Income Information

The recently released 2021 U.S. Census reports show North Carolina having a median household income of $60,516, somewhat lower than the national median of $69,021. North Carolina is characterized by a vibrant and multifaceted economy, encompassing a range of industries such as finance, manufacturing, technology, and agriculture, which collectively contribute to its thriving economic landscape. North Carolina’s median household income varies by county, with Wake County being the highest at $83,567, and Washington County being the lowest at $30,941, the state’s poverty rate was 13.4% in 2021.

United States Census Bureau. “Poverty in the United States: 2021.” Accessed on May 12, 2023.
United States Census Bureau. U.S. Census Bureau QuickFacts: North Carolina. Accessed on May 12, 2023.

North Carolina Payday Lender Complaints

Below are trends associated with some payday lenders in North Carolina, as reported to the Consumer Financial Protection Bureau.

Company Name	Count
Big Picture Loans, LLC	27
Delbert Services	24
LDF Holdings, LLC	17
CASHCALL, INC.	14
Populus Financial Group, Inc. (F/K/A Ace Cash Express)	10
Mobiloans, LLC	11
Total Complaints	278

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on May 12, 2023.

Most Common Issues

Complaint type	Count
Charged Unexpected fees or interest	132
Struggling to pay loan	28
Can’t contact lender	25
Problem with payoff process	12
Can’t stop charges to bank account	11

What are the main reasons Americans apply for payday cash advance online or offline

Payday loans are typically used for nonnegotiable everyday expenses like your rent, utilities, and groceries. Per data reported by Pewtrust, the percentage of reasons described below

Reason	Share
Regular Expenses (Utilities, car payment)	53%
Unexpected emergency/expense	16%
Rent/Mortgage	10%
Something Special	8%
Other	5%
Did not answer	2%

Payday Lenders by City

Charlotte
Raleigh
Greensboro
Durham
Winston-Salem
Fayetteville
Cary
Wilmington
High Point
Concord

Asheville
Greenville
Gastonia
Jacksonville
Chapel Hill
Huntersville
Apex
Burlington
Rocky Mount
Kannapolis

Mooresville
Wilson
Wake Forest
Hickory
Holly Springs
Indian Trail
Salisbury
Monroe
Goldsboro
Fuquay-Varina

Frequently Asked Questions

Are online payday loans legal in North Carolina?

No, online payday loans are illegal in North Carolina.

Can I get a payday loan from a tribal lender in North Carolina?

No, payday loans from tribal lenders are also illegal in North Carolina.

Are there any exceptions to the payday loan ban in North Carolina?

No, there are no exceptions to the payday loan ban in North Carolina.

Can I take out a payday loan from a neighboring state if I live in North Carolina?

No, it is not advisable to take out a payday loan from a neighboring state if you live in North Carolina, as the loan would still be subject to North Carolina’s laws and regulations.

What are the consequences for payday lenders operating illegally in North Carolina?

Payday lenders operating illegally in North Carolina may face legal penalties and enforcement actions, including fines and license revocation.

What should I do if I have been a victim of a payday loan scam in North Carolina?

If you have been a victim of a payday loan scam in North Carolina, you should report the incident to the North Carolina Attorney General’s Office and seek legal assistance to protect your rights and pursue any available remedies.