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A Complete Guide to Payday Loan Consolidation in Kansas
Kansas was one of the first states in the country to enact payday loan regulations decades ago. This strict stance against the predatory loan practice could continue with the passing of stringent new laws currently being considered by the state.
As it stands right now, however, borrowers can still fall victim to the high-interest debt that comes with payday loans.
For those looking for a way to escape the debt trap, payday loan consolidation may be the solution you need.
Payday loan laws in Kansas
Throughout the state, Kansas only allows payday loans of $500 or less. The APR is uncapped, however, leading rates to average 391% per loan. Loan terms can last between seven and 30 days with rollovers prohibited. Lenders are required to record all payday loan transactions they perform and must establish a written contract with the borrower. Lenders can only give out two loans at a time per customer.
Additional charges include a maximum 15% charge on the loan amount plus a $15 nonsufficient funds fee. Kansas law dictates that borrowers who pay off their loan in full by the next business day after the loan was taken out do not have to pay any fees or charges on their loan amount.
As of early 2021, Kansas' State Legislature was considering a new bill shoring up its payday loan laws. House Bill 2189 would have, among other consumer-friendly provisions, capped payday loan interest rates at 36% for loans under $860, and cap loans over $860 at 21%. This law, which is still under review, could revolutionize payday loan practices in Kansas and make it one of the strictest regulators in the nation. However, the bill is currently stalled. It's unlikely any further action will be taken on the measure in 2021.
What will happen if you can't repay a payday loan in Kansas?
What Will happen if You Can’t Repay a Payday Loan in Kansas
Borrowers will not face jail time for being unable to pay back their payday loan in Kansas, but the lender will likely try to get their money back through a variety of methods. Since most lenders require you to give them contact information in the application process, borrowers may receive calls, emails, or letters in the mail requesting repayment.
Lenders could also bring borrowers to court, even if you believe they are in the wrong. Always appear for a court summons, no matter the circumstances. Lenders are not required to verify if you are able to pay
back the loan, so you enter into an agreement with them at your own risk.
What is the statute of limitations on payday loans in Kansas?
In Kansas, the statute of limitations is five years. This means that lenders have up to five years to try and get their money back via the court system.
How to consolidate your payday loans in Kansas
Kansas payday loan borrowers have a solution to the high-interest debt hanging over their head: payday loan consolidation. Also called credit consolidation and payday loan relief, this method ngroups together all of a borrower’s loans into one larger loan at a reduced, flat monthly rate. Third-party companies typically offer this service to borrowers. They will pay off any outstanding loans you have, and in exchange, you will pay them a fixed rate over a certain period of time. This allows the borrower to get lenders off their back in addition to getting a more manageable payment plan.
Borrowers could also take out a separate loan on their own that they would use to pay off their other loans. All of your loans would then be grouped together under a single interest rate, making it easier to work with. If you have good credit, a credit card company might offer a low or 0% interest balance transfer offer. These offers usually charge a fee to transfer the money, but if you can pay off what you owe before the introductory period expires, you can save hundreds of dollars in interest. That said, taking out an additional loan could repeat the debt cycle all over again for the borrower. Fees and penalties could apply as well if you make a late payment.
Another method borrowers could think about is a debt management plan (DMP). A DMP is similar to a payday relief loan in that all of a borrower's loans are condensed into one single loan with a fixed interest rate. Debt management plans are usually set up by nonprofit credit counseling services.
For those in need of relief from payday loan debt piling up, payday loan consolidation is definitely something to consider. Borrowers in Kansas can always explore local options for assistance with their payday loans.
By the numbers: Payday lenders in Kansas
By the Numbers: Payday Lenders in Kansas
● Max loan term: 30 days
● Average loan amount: $300
● Maximum loan amount: $500
● APR Cap: None, the average is 391%
● Number of payday lenders in Kansas: 176 (as of 2019)
● Average 14-day payday loan APR: 391%
● Collection fees: A maximum 15% charge on the loan amount plus a $15 NSF fee
● The poverty rate in Kansas: 11.4%
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Other resources for help paying my payday loan in Kansas
Being stuck in a payday loan debt cycle can be extremely stressful. While there’s no going back to prevent yourself from taking out a payday loan in the first place, there is a solution to get out of this problem and get back to living the life you love. By employing one of the payday loan consolidation methods above, borrowers can get back on track toward financial stability.
700 SW Jackson St #300
Topeka, KS 66603
Phone number: 785-380-3939
Additional state resources to utilize: