Cash advance, or payday loan, businesses offer individuals short term loans to help them make it from payday to payday in the event of a financial emergency. Despite the industry's increasing popularity, many remain clueless about the ins and outs of a cash advance. Each state has different laws and regulations that govern the cash advance industry and Alaska is no different, so before taking a cash advance in Alaska it is important for an individual to understand what they are getting involved in.
The cash advance process in Alaska is much the same as that which takes place in every state across the United States. Individuals in need of fast cash can go into a cash advance or payday loan location and acquire a short term loan. Most cash advance loans are for amounts below $1,000 and must be repaid within two weeks. In most cases individuals write a check for the amount of the loan (plus fees) to the cash advance company with a post date two weeks from the date of the loan. The company then loans them money, either writing them a check on the spot or setting up an immediate electronic fund transfer.
Online Cash Advance in Alaska
When the two week loan period is up, two things can happen. If the individual has the money in their checking account, the cash advance company cashes the check left with them and the transaction is completed. Individuals also have the option of "rolling over" the loan period for two more weeks. This in effect delays the payment back to the institution at the expense of interest accruing. This is most often where people find themselves getting deeper into financial trouble.
Individuals considering a cash advance in Alaska should approach their transaction with caution. Alaska has safe harbor laws in place for the cash advance industry, providing businesses with the upper hand. Cash advances in Alaska are governed by laws that allow loans with interest rates in the triple digit range. Cash advance businesses are also not allowed to pursue criminal actions against borrowers whose checks are returned as a result of their bank accounts being closed. Fortunately for borrowers, there is no limit to the number of loans they may have out at one time.
Other important laws to be aware of regarding cash advances in Alaska are:
- Loan Amounts: Individuals cannot take out cash advance loans greater than $500
- Loan Periods: Loan periods for cash advances must last a minimum of two weeks
- Extensions or Roll Overs: Alaska residents may not roll over or extend their loan more than twice
- Fees and Charges: Lenders may not charge more than a $5 as an origination fee, nor can they charge more than $15 on a $100 loan, or 15% of the loan amount, whichever is greater.
