Listed in alphabetical order these states, Alabama, Alaska, Arizona, Connecticut, Georgia, Maine, Maryland, Massachusetts, Michigan, New Jersey, New York, North Dakota, Pennsylvania, Rhode Island, Texas, Vermont, Virginia and West Virginia have all capped the interest rates that payday advance companies can charge to 36%. This may not seem too bad when you look at it like that.

Now look at it when you break it down for a 500 dollar payday advance it comes out to be 36 dollars per 100 dollars you borrow. That comes out to an interest rate of 180 dollars to borrow 500 dollars for one or two weeks depending on your pay schedule at work.

The above mentioned 18 states have also restricted interest rates in other ways by putting forth laws that restrict how many much a payday advance can be obtained for, the maximum and minimum terms of a payday cash advance and even the maximum fees and charges that can be collected on a payday advance loan.

These 18 states have even gone a step further by the laws they have enforce by controlling the way payday advance companies operate and by controlling the companies themselves. Now this can be a good thing or a bad thing since the state can regulate completely how a payday advance company works.

These 18 states seems to have a firmer grasp to how cash advance companies can run there businesses in these states. If they violate these laws by charging excessive interests rates or any of the other laws the state fines these companies. Some states even require that payday advance companies carry insurance and file annual reports with the state they reside in.

Though the states regulates how payday advance companies are run you still need to be careful when it comes to your own budgets as payday advance can get of hand and you will end up further into debt with the pay back costs for these small loans. They are due to be paid back in full by the terms stated in your contract. If you find you are unable to pay back your payday advance you will need to “flip” your loan into a new loan. Flipping your loan means you will pay back in full the amount of your debt plus the finance charges. So to utilize the information in the beginning of this article if it costs you 36 percent to borrow 500 dollars your pay back is 180 dollars. If you need to flip your loan once a week for a full month the cost to borrow that same 500 dollars now has become 720 dollars to borrow 500. That’s a very steep price to pay for borrowing 500 dollars.

Payday advance loans are meant to be a quick fix to a problem that you are able to pay back when your contract states. If you know you will not be able to pay back a payday advance in the terms set forth your better bet is to try and find another means to borrow money.