Michigan

In Michigan, the term limit for payday loans is 31 days following the date of the transaction. In addition, the written agreement the borrower signs must contain the name address, and phone number of the payday loan lender, an itemization of fees and interest charged, a clear description of the borrowers payment obligations to the payday lender, as well as an example the amount the borrower would pay based on the amount of the loan. The agreement form should also have a description of the process they can follow to file a complaint against the cash advance lender.

Most importantly, all agreement forms for payday loans in Michigan must have the following text in 10-point bold face type:

“A deferred deposit loan is not intended to meet long-term financial needs. The payday lender cannot use any criminal process to collect any deferred deposit loan.”

“State law prohibits you from having outstanding at any time deferred deposit loans totaling more than $500. Failure to obey this Michigan law could result in financial hardship for you and your family.”

In addition to an administration fee of $5, a payday lender in Michigan can also charge a service fee, but only if the service fee is not in excess of a 25 percent annual interest rate. Michigan law states that borrowers can make partial payments on the loan at anytime without accruing additional fees. The largest amount of money a person can borrow at any one time in Michigan is $500.

In Michigan, if a borrower pays the lender the full amount of the payday loan before 5 p.m. the same day of the transaction, they cannot be charged any fees whatsoever. Michigan law also states that once a payday loan is paid off, a payday lender cannot enter into another agreement with that customer for a period of at least 24 hours.