Payday Loans are Legal in Rhode Island

Beware of predatory lending

Payday Lenders in Rhode Island

In Rhode Island, payday loans offer immediate financial assistance to those facing unexpected expenses or emergencies. They are designed to be paid back the next time the borrower gets a paycheck.

Payday loans have become increasingly popular in Rhode Island over the years, with nearly 20% of the state’s population taking out a payday loan in the past year. This is a high rate compared to other states, and it’s important for borrowers to understand the potential risks and benefits of payday loans before taking one out.

Lenders who offer payday loans in Rhode Island must adhere to state regulations and licensing requirements. Some lenders engage in predatory practices, like charging excessive fees or failing to disclose all of the terms of the loan, but reputable lenders prioritize borrower protection and will try to ensure transparency and fairness throughout the process. It is crucial for borrowers to carefully consider the potential risks and consequences before taking out a payday loan in Rhode Island and to work only with reputable lenders who prioritize their best interests.

Payday Loan Laws

Payday loans are referred to as deferred deposit transactions under the Check Cashers Act that regulates payday lenders and loan terms in the state of Rhode Island.

Rhode Island has several code that regulates the payday loan industry:

Loan Terms and Conditions

Maximum loan amount: $500

Maximum Interest Rate: 261%

Minimum loan term: 13 days

Maximum loan term: no maximum in regulation

Number of rollovers allowed: 1

Finance Charge: 10% of amount financed

Legal action: 10 Years

Certified Payday Lenders in Rhode Island

Company Name	Company score	License Status
Delbert Services	7.6	Valid
CURO Intermediate Holdings	7.2	Valid
ENOVA INTERNATIONAL, INC.	6.8	Valid
MoneyLion Inc.	6.1	Valid
COMMUNITY CHOICE FINANCIAL, INC.	5.8	Valid
Advance America, Cash Advance Centers, Inc.	5.3	Valid

History of Rhode Island Payday Loans

In 2001, Rhode Island included payday lending in its check cashing statute, which led to the opening of payday loan stores in the state. However, despite attempts to introduce new regulations, the industry remains unregulated. In 2018, S 2173 was proposed to eliminate the exemption from usury laws and introduce a 36% cap small loan cap, but the bill did not pass. Another proposed bill, S 2333, would have allowed small loan lenders to charge fees as long as they were disclosed and agreed to in writing. However, it also failed to pass, and Rhode Island remains without specific regulations on payday lending.

State Resources

How to file a complaint

The State of Rhode Island Division of Banking manages all complaints about payday lenders. Consumers must print out the form from their website and return it to their address. There is no online format to submit a complaint. The Division cannot give legal advice or recommend an attorney but they will investigate complaints that are made in writing so long as they fall within their jurisdiction.

Rhode Island Payday Loans Debt Relief

How to Get out of Payday Loan Debt?

There are some steps you can take to get out of a payday loan cycle, no matter how hopeless it may seem. The first step is to negotiate a repayment plan with your lender. This may allow you to pay back your debt gradually. Some nonprofits offer financial aid and counseling programs and credit counseling agencies can assist you in creating a plan to manage your debt. Explore options to consolidate your payday loans with other debts, since this may result in lower interest rates and easier repayment terms. It is important to seek help as soon as you can and to avoid taking on additional debt.

Support Resources

Types of Quick Loans in Rhode Island

Payday Alternative Loans Payday alternative loans (PALs) provide borrowers in Rhode Island with an affordable alternative to traditional payday loans. These loans are offered by credit unions and have more favorable terms, such as lower interest rates and longer repayment periods. PALs also have certain restrictions on fees and interest rates, which protect borrowers from excessive charges. PALs are ideal for those who need emergency cash but are unable to obtain a traditional bank loan due to poor credit history or lack of collateral. They offer a flexible and affordable option for those in need of short-term financing.

Installment Loans Installment loans provide borrowers with a structured repayment plan, making it easier to manage their finances. With an installment loan, borrowers receive a lump sum of money upfront and repay it over a set period, typically in equal monthly installments. Interest rates on installment loans may be higher than those on traditional bank loans, but they are typically lower than those on payday loans or other forms of high-interest financing. Installment loans can be secured or unsecured, and they are ideal for those who need to make a large purchase or consolidate high-interest debt.

Line of Credit Loans Personal lines of credit are a flexible financing option in Rhode Island that provides borrowers with access to funds as needed. With a personal line of credit, borrowers can withdraw funds as needed up to a set limit, and interest is only charged on the amount withdrawn. This makes it a cost-effective alternative to credit cards or other forms of borrowing. Personal lines of credit can be secured or unsecured and are ideal for those who need access to funds for unexpected expenses or short-term financing needs.

Alternatives to Payday Loans in Rhode Island

Personal Loans

Personal loans are available in Rhode Island through banks, credit unions, and online lenders. These loans can be used for a variety of purposes, such as consolidating debt or making home improvements. Rhode Island residents can apply for personal loans with fixed or variable interest rates, and loan amounts can range from a few thousand dollars to tens of thousands of dollars. Some lenders may require collateral or a co-signer for approval, but others offer unsecured loans. The interest rates and terms of personal loans in Rhode Island vary depending on the lender and the borrower's creditworthiness.

Land Loans

Land loans are a type of loan that is used to purchase undeveloped land in Rhode Island. These loans can be used for residential or commercial properties and can be either secured or unsecured. Land loans typically have higher interest rates and shorter repayment terms than traditional home loans, and lenders may require a higher down payment or additional collateral. Rhode Island has unique regulations for land loans, including restrictions on subdivisions and environmental concerns, so it's important to work with a lender who is familiar with these regulations.

Bridge Loans

Bridge loans in Rhode Island are short-term loans that provide financing to bridge the gap between the sale of one property and the purchase of another. These loans can help Rhode Island residents secure a new property before they have sold their current one. Bridge loans usually have higher interest rates and fees than traditional loans and must be repaid quickly, typically within six months to one year. However, they can be a valuable option for those who need to act quickly to secure a new property.

Bad Credit Loans in Rhode Island

For those with bad credit in Rhode Island, there are lenders that offer bad credit loans. These loans come with higher interest rates than traditional loans because they are considered high risk. Borrowers with bad credit in may be required to provide collateral or a co-signer to secure the loan. Some lenders may also require a higher down payment or charge additional fees. However, bad credit loans can be a good option for those who need money quickly and cannot qualify for a traditional loan.

Rhode Island Small Business Loans

Rhode Island provides several types of small business loans with different requirements and terms:

SBA loans: Loans that are backed by the U.S. Small Business Administration, which offer lower interest rates and longer repayment terms than conventional loans.
Rhode Island Capital Access Program (RI CAP): A state-funded loan loss reserve program that helps small businesses obtain loans by providing lenders with a partial loan guarantee.
Rhode Island Economic Development Corporation (RIEDC) Loan Programs: RIEDC offers a range of loan programs to small businesses, including the Small Business Loan Fund, Small Business Assistance Loan Fund, and Innovation Voucher Program.
Invoice financing: A type of financing that gives businesses an opportunity to receive cash advances on unpaid invoices. The invoices serve as collateral.
Microloans: Small loans provided by nonprofit organizations or community lenders to help small businesses get started or expand.

VA loans in Rhode Island

VA loans are a type of loan that is available exclusively to veterans and their spouses. These loans are guaranteed by the Department of Veterans Affairs and offer competitive interest rates and flexible terms. Rhode Island veterans can use VA loans to purchase a new home, refinance an existing mortgage, or make home improvements. VA loans in Rhode Island do not require a downpayment and may have lower credit score requirements than traditional loans. However, there are eligibility requirements, and it's important to work with a lender who is experienced in VA loans and understands the unique needs of veterans.

Rhode Island Student Loans

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

Federal Student Loans: Loans provided by the federal government offering low-interest rates and flexible repayment plans.
Rhode Island Student Loan Authority: This state agency offers fixed and variable-rate student loans with flexible repayment options and competitive interest rates.
Discover Student Loans: Offers private student loans for undergraduate and graduate students with no application fees and cash rewards for good grades.
Private Student Loans: Loans from private lenders, they commonly have higher interest rates and may require a co-signer.

Rhode Island Income Information

According to the 2021 U.S. Census, Rhode Island had a median household income of $74,489, slightly higher than the national median of $69,021. Rhode Island’s economy is driven by industries such as healthcare, education, and financial services, with the latter being the state’s largest industry. The poverty percentage in Rhode Island in 2021 was 11.4%. Median household income and poverty levels are fairly similar by county in Rhode Island, with Washington County having the highest median income at $86,970 and Providence County having the lowest at $62,323.

United States Census Bureau. “Poverty in the United States: 2021.” Accessed on April 30, 2023.
United States Census Bureau. U.S. Census Bureau QuickFacts: Rhode Island. Accessed on April 30, 2023.

Rhode Island Payday Lender Complaints

Below are trends associated with the top payday lenders in Rhode Island, as reported to the Consumer Financial Protection Bureau.

Company Name	Count
Delbert Services	10
CURO Intermediate Holdings	9
ENOVA INTERNATIONAL, INC.	5
MoneyLion Inc.	3
COMMUNITY CHOICE FINANCIAL, INC.	3
Advance America, Cash Advance Centers, Inc.	1
Total Complaints	60

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on April 30, 2023.

Most Common Issues

Complaint type	Count
Charged unexpected interest or fees	29
Can’t contact lender	8
Payment not credited to account	5
Can’t stop withdrawals from account	5
Received a loan did not apply for	3

What are the main reasons residents of Rhode Island 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

Providence
Warwick
Cranston
Pawtucket
East Providence
Woonsocket
Cumberland
Coventry
North Providence
South Kingstown

West Warwick
Johnston
North Kingstown
Newport
Westerly
Lincoln
Bristol
Central Falls
Smithfield
Portsmouth

Barrington
Middletown
Tiverton
Burrillville
Narragansett
East Greenwich
North Smithfield
Warren
Scituate
Glocester

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 Rhode Island, you will typically need to provide your identification, proof of income, bank account information, and contact information.

Can I cancel my payday loan?

Rhode Island law allows borrowers to cancel their payday loan within one business day of receiving the funds. This is known as the right of rescission. To cancel the loan, the borrower must return the full amount of the loan to the lender by the end of the business day.

Can a payday loan lender garnish my wages?

In Rhode Island, lenders can garnish your wages to repay loan debts.

Can spouses have separate loans?

Rhode Island law does not specifically address whether spouses can have separate payday loans, but it is generally possible for each individual to apply for and obtain a payday loan independently.

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

If you are approved for a payday loan in Rhode Island, you will typically receive your funds on the same day or the next business day.

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

You may face additional fees and charges, and the lender may take legal action or send the debt to a collection agency, but it’s important to communicate with the lender and explore all available options.

When could I apply for another payday loan?

In Rhode Island, you can apply for a new payday loan immediately after you pay the current one off.