Most of the time when someone applies for a loan, they’ll want to know what the fee or APR will be. By law, lenders are required to provide this information for applicants to review. Online payday loan lenders are no exception to this requirement.
Oftentimes an applicant will not find the fees or annual percentage rates listed on payday loan sites however. It could be that the lender has neglected to provide the information, or more likely is that the payday loan website is not run by a direct lender. In the case that a site providing online loans is not a direct lender, you should be supplied with APR and fee information by the lender you are matched with after you apply for the loan.
You should only begin to worry that a lender is not following the regulations set out by the Truth in Lending Act after you have established that the payday company is a direct lender. Most direct payday lending sites will make it very clear whether or not they are the direct provider of the loan. Lightspeed Payday clearly states it is not a direct lender.
The Truth in Lending Act was established to protect consumers who borrow money regardless of whether the loan is open or closed-ended. Payday loans are closed-ended.
The rule specifying that payday loans are applicable to the regulations outlined in the Truth in Lending Act was added in March, 2000. It specifically states that a lender must reveal the cost of the loan or APR as a dollar amount. The rule was amended to the act because some payday loan lenders were arguing that a payday loan was not an extension of credit. This rule is termed "Regulation Z".
