Payday Loans are Legal in Delaware

Beware of predatory lending

Payday Lenders in Delaware

When unexpected expenses or emergencies arise in Delaware, payday loans offer a quick fix for many residents. They typically address unexpected expenses or emergencies, such as medical bills or car repairs.

However, payday loans often draw criticism due to their exorbitant interest rates and fees, like the staggering 521% average APR for payday loans in Delaware, which can make repayment more challenging for borrowers. In fact, nearly 90% of payday loans in Delaware are taken out by borrowers who end up taking out additional loans to cover the previous ones. Despite this criticism, payday loans remain a popular solution for a lot of residents who need fast cash. It’s important to exercise caution and thoroughly understand the loan’s terms and conditions and any additional charges associated with it.

Make sure you compare and research the different lender options available in Delaware to avoid predatory payday lenders. Look for licensed lenders who disclose fees and interest rates upfront, and be wary of those who encourage you to borrow more than you need or don’t provide clear repayment terms. Borrowers should also be aware of their rights under Delaware state law, which provides some protections for borrowers against these predatory lending practices. With careful consideration and responsible borrowing, payday loans can offer a viable solution for those in need of quick cash.

Payday Loan Laws

Each state has its laws surrounding payday lending, and Delaware has some of the strictest regulations that still allow the legal practice. There is a limit on the amount that can be given, maximum term, and restrictions on loan renewals and rollovers. Additionally, while most states only require a borrower’s signature before a payday loan can be finalized, Delaware also requires a thumbprint. These regulations aim to protect borrowers from predatory lending practices and encourage responsible lending.

The State of Delaware has several other pieces of legislation surrounding payday loans:

5 Del. C. § 978: Dictates that lenders cannot make more than 4 rollovers on existing payday loans and prohibits lenders from taking or threatening criminal action for non-payment.
5 Del. C. § 2227: Lays out terms for repayment plans that provide for equal installments over at least 90 days when a borrower cannot pay and prohibits additional fees and interest on these plans.
5 Del. C. § 2335: Limits the number of payday loans by any borrower to 5 in one 12-month period.
5 Del. C. § 2231: Dictates the terms for collection fees and delinquency charges that payday lenders can assess on borrowers when they cannot make payments.

Loan Terms and Conditions

Maximum loan amount: $1000

Maximum Interest Rate: no limit

Minimum loan term: No minimum

Maximum loan term: 60 days

Number of rollovers allowed: 4

Finance Charge: no limit

Legal action: 3 Years

Certified Payday Lenders in Delaware

Company Name	Company score	License Status
Enova International, Inc.	7.3	Valid
CURO Intermediate Holdings	7.0	Valid
Check Into Cash, INC	6.4	Valid
Populus Financial Group, Inc.	6.1	Valid
CNG Financial Corporation	5.9	Valid
Community Choice Financial, Inc..	5	Valid

History of Delaware Payday Loans

Payday loans have been available in Delaware since the early 1980s when lenders operated more or less freely. In 1987, the Delaware Office of the State Bank Commissioner began regulating the industry. Over time, laws have been introduced to protect vulnerable borrowers. The Military Lending Act in 2006 set a 36% APR cap on payday loans for military personnel. In 2012, Delaware passed H.B. 289, which limited borrowers to five loans per 12-month period and established a database to track loan activity. In 2016, the H.B. 446 bill aimed to further protect borrowers but failed to become law.

State Resources

How to file a complaint

The Office of the State Bank Commissioner (OSBC) regulates payday lenders in Delaware and provides information about payday lenders’ licenses or complaints. Delaware is unique because it prefers borrowers contact the compliance department via phone before submitting an official complaint. They will discuss the situation and determine whether an investigation is warranted. If they believe they should proceed with an investigation, borrowers will submit their complaint in writing to the office.

Delaware Payday Loans Debt Relief

How to Get out of Payday Loan Debt?

These loans can quickly turn a short-term need into a never-ending cycle of debt. Finding a way to balance repayment of payday loans with living expenses can be challenging, leading to repeated borrowing and more debt. Although this is difficult for Delaware borrowers, there are ways they can escape payday loan debt. Borrowers should contact their lender and try to negotiate a repayment plan, such as reducing amounts owed or extending payment periods. Refinancing with lower-rate loans may also be considered. Bankruptcy should only ever be pursued as an absolute last resort and discussed with legal counsel before filing for it.

Support Resources

Types of Quick Loans in Delaware

Title Loans Title loans are a type of secured loan available in Delaware in which borrowers use their vehicles as collateral. Loans secured against vehicles often come with higher interest rates than other loan types, making them an expensive solution. Furthermore, should borrowers default on their payments, they could lose their vehicle to the lender. Although title loans offer quick access to cash, borrowers must sift through all options.

Installment Loans Installment loans in Delaware are a type of loan in which borrowers make regular payments over a fixed period until the loan is paid off. Unlike payday or title loans, installment loans typically have lower interest rates and longer repayment terms. This makes them an affordable option for borrowers who need quick cash but cannot pay it back all at once. Nevertheless, borrowers in Delaware should still be aware of the interest rates and fees associated with the loan, as they can vary depending on the lender.

Credit Card Cash Advances In Delaware, Credit card cash advances allow borrowers to withdraw cash from their credit card account. These advances can be convenient but come with higher interest rates and fees than regular credit card purchases. Moreover, interest on a credit card cash advance typically starts accruing immediately, meaning borrowers will start paying interest on the borrowed amount right away. Before deciding to get a credit card cash advance in Delaware, borrowers should review the terms and conditions of their credit card agreement and weigh the costs and benefits.

Alternatives to Payday Loans in Delaware

Personal Loans

Personal loans are unsecured and designed for many purposes, including consolidating debt, home improvements, or medical bills. Usually, these loans offer fixed interest rates with repayment terms that span multiple months to years. In Delaware, personal loans can be issued by traditional banks, credit unions, and online lenders. Interest rates and fees can vary significantly based on credit score and other factors.

Land Loans

Land loans are secured loans available in Delaware and are used to purchase or refinance land, such as residential lots, agricultural land, or undeveloped land. Lenders view these loans as riskier, so they typically carry shorter repayment terms and higher interest rates than other types. If a borrower in Delaware wants to obtain a land loan, they should be prepared to pay an extensive down payment, have an excellent credit score, and have a clear plan for how they intend to utilize their land. Land loans in Delaware are available from banks, credit unions, and private lenders. Borrowers should be prepared to provide additional documentation, such as property surveys, to facilitate the loan process.

Home Equity Loans

Home equity loans are secured loan that uses the borrower's home equity as collateral. These loans commonly have lower interest rates than other loan types due to the collateral involved. Delaware homeowners can typically borrow up to 80% of their home's equity, depending on the lender and the borrower's creditworthiness. They can be used for various purposes, including home renovations, medical bills, or education expenses. However, before applying, borrowers should carefully weigh the risks associated with using their home as collateral.

Bad Credit Loans in Delaware

Delaware bad credit loans cater specifically to borrowers who have poor credit scores or limited credit histories. Due to the higher risk involved, lenders may charge higher interest rates and fees on such loans, and the amount borrowed may also be comparatively lower. Bad credit loans are available in both secured and unsecured forms, with secured loans requiring collateral, such as a vehicle or savings account. Borrowers with bad credit scores are advised to perform thorough research and compare terms and fees from different lenders before borrowing. They should be mindful that the costs of such loans can be significantly higher than traditional loans. Proper evaluation of loan terms, timely payments, and responsible use of credit can help borrowers to rebuild their credit scores over time.

Delaware Small Business Loans

There are several types of small business loans available in Delaware, including:

SBA loans: Loans that are partially guaranteed by the U.S. Small Business Administration and are designed to help small businesses access capital and obtain favorable loan terms.
Business lines of credit: A flexible borrowing option that gives businesses access to funds as they are needed. Interest is only paid on the amount borrowed.
Business Term Loans: A lump sum of money borrowed and repaid over a set period, typically with a fixed interest rate.
Invoice financing: A financing option that allows businesses to receive an advance on their unpaid invoices, with repayment once the invoice is paid.
Merchant Cash Advance: A lump sum of money provided to businesses in exchange for a percentage of future credit and debit card sales.

VA loans in Delaware

VA loans are government-backed mortgage loans that offer many benefits to eligible veterans, service members, and their surviving spouses residing in Delaware. These loans provide an opportunity for these individuals to purchase a primary residence, including single-family homes, townhouses, and condominiums. One significant advantage of VA loans is the ability to finance up to 100% of the home's value with no down payment required. Additionally, VA loans, in Delaware, do not require private mortgage insurance, saving borrowers thousands of dollars over the life of the loan. Eligibility criteria for VA loans include meeting specific military service, credit score, and income requirements and obtaining a Certificate of Eligibility from the VA.

Delaware Student Loans

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

Federal Student Loans: These loans are offered by the federal government and include Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans.
Delaware Higher Education Office (DHEO) Loans: The DHEO offers loans to Delaware residents who attend college in-state or out-of-state. The loans are intended to supplement federal loans.
Delaware Community Foundation Scholarships: Offered to Delaware residents who plan to attend college. The scholarships are based on merit, financial need, or other criteria established by the donor.
Private Student Loans: Loans from private lenders, they commonly have higher interest rates and may require a co-signer.

Delaware Income Information

According to the 2021 U.S. Census, Delaware had a median household income of $72,724, slightly higher than the national median of $70,717. The state’s economy is diversified, with industries such as healthcare, education, finance, and tourism playing a significant role in generating income. While the state has a relatively low unemployment rate compared to the national average, areas of the state still struggle with economic hardship, particularly in rural areas. Because of this, median household income and poverty levels vary significantly by county in Delaware, with New Castle County having the highest median income at $93,854, 8.9% above the state average, and Kent County has the lowest at $60,117, only 7.5% below the national average. Additionally, the cost of living in Delaware is higher than the national average, which can put a strain on households with lower incomes. The poverty percentage in Delaware in 2021 was 11.6%.

United States Census Bureau. “Poverty in the United States: 2021.”< Accessed on April 18, 2023. United States Census Bureau. U.S. Census Bureau QuickFacts: Delaware . Accessed on April 18, 2023.

Delaware Payday Lender Complaints

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

Company Name	Count
Enova International, Inc.	6
CURO Intermediate Holdings	5
Check Into Cash, INC	3
Populus Financial Group, Inc. (F/K/A Ace Cash Express)	2
CNG Financial Corporation	1
Community Choice Financial, Inc..	1
Total Complaints	54

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on April 18, 2023.

Most Common Issues

Complaint type	Count
Received a loan didn’t apply for	13
Struggling to pay loan	13
Communication Tactics	2
Unable to contact lender	1
Incorrect Information on Report	1

What are the main reasons residents of Delaware 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

Wilmington
Dover
Newark
Middletown
Bear
Glasgow
Brookside
Hockessin
Smyrna
Pike Creek Valley

Milford
Claymont
Wilmington Manor
North Star
Seaford
Pike Creek
Georgetown
Edgemoor
Millsboro
Elsmere

New Castle
Highland Acres
Laurel
Clayton
Camden
Rising Sun-Lebanon
Harrington
Lewes
Milton
Dover Base Housing

Frequently Asked Questions

Will applying for a payday loan impact my credit?

Payday loans are typically not reported to the three major credit reporting agencies, and most lenders do not conduct credit checks as part of their application process.

What do I need to apply for a payday loan?

To apply for a payday loan in Delaware, you typically need to provide proof of income, such as a pay stub or bank statement. You will also need to provide personal information, such as your name, address, and Social Security number, as well as information about your employment and banking history.

Can I cancel my payday loan?

Delaware law allows borrowers to cancel their payday loan within one business day of disbursement without penalty or interest by notifying the lender in writing and returning the full loan amount.

Can a payday loan lender garnish my wages?

Payday loan lenders cannot garnish wages in Delaware as wage garnishment is prohibited for consumer debts, but they may pursue legal action against borrowers who default on their loans.

Can spouses have separate loans?

Yes, spouses can have separate payday loans in Delaware as long as they individually meet the lender’s eligibility requirements and can provide the necessary documentation and information to apply.

When will I receive my funds if I am approved for a payday loan?

Funds are typically received on the same day or the next business day after loan approval, and can be disbursed through various methods, such as direct deposit or a prepaid debit card.

What happens if I can’t repay my payday loan on time?

If a borrower is unable to repay their payday loan on time in Delaware, the lender may charge additional fees, extend or roll over the loan, report the delinquent account to credit bureaus, or pursue legal action.

When could I apply for another payday loan?

Borrowers can apply for another payday loan as soon as they have repaid their current loan in full, but it’s important to consider alternative options for borrowing and keep in mind the state’s limit of five payday loans within a 12-month period.