Minnesota’s laws on payday loans are similar to Kansas. Under Minnesota’s laws a payday lender is guaranteed a certain fee for their services. For payday loans up to $50, a $5.50 fee can be added to the total amount. For payday loans in the amount of $50 to $100, ten percent of the loan plus a $5 fee may be applied. For amounts of $100 to $250, a 7 percent charge plus a $5 administration fee may be applied. And for loan amounts greater than $250, a fee of six percent of the loan plus a $5 administrative fee may be added.
Just like Kansas, the term of a payday loan in Minnesota cannot exceed 30 days. After the term is up for a payday loan, the interest can accumulate but no more than 2.75 percent each month. Payday loan lenders in Kansas can also charge extra fees to borrowers that have insufficient funds
Minnesota also prohibits loan splitting. Loan splitting is dividing two loans and charging interest on both. Under Minnesota law this act is prohibited. The maximum amount in fees that a payday loan store in Kansas can charge on one loan is $350.
Payday loan stores in Minnesota must also meet certain requirements regarding loan agreements. Under Minnesota law, all agreements must have:
- Name, address, and telephone number of the Department of Commerce.
- Trade name of the payday loan provider.
- Date of the transaction.
- The amount dispersed.
- Term length of the payday loan.
- The last day of the deferment period.
- Clear description of the borrowers payment obligations.
Also, it’s important to note that in Minnesota the amount of the check being held, cannot exceed the funds dispersed plus the cost of fees.