Are you based in the state of New Jersey and looking to raise a few hundred dollars to cover the costs of a financial emergency? If so, you might be aware that payday loans are no longer permitted. Instead, loan providers must have a state-issued lending license – and loans are capped to a maximum APR of 30%.
With that said, although online payday loans are prohibited, there are still a number of alternative financing options available to you. This includes the likes of short-term loans, personal loans, auto title loans, and even Tribal loans. Each loan type comes with its pros and cons, so be sure to assess whether or not the financing structure meets your needs before applying.
In this guide, we review a range of the best alternatives to Payday Loan Lenders in New Jersey 2020. Within, we give you a full breakdown of what your financing options are as a New Jersey resident, alongside how much you’ll likely pay in interest.
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Why are Payday Loans Banned in New Jersey?
Prior to 2008, the payday loan space was big business in the state of New Jersey. Residents could borrow a few hundred dollars by submitting a quick application online, and then have the funds deposited into their checking account later in the day. As convenient and burden-free as these online loans were, they often came with extortionate interest rates. In fact, while this averaged 400% per year, some lenders would charge in excess of 1,000% APR.
As a result, the state of New Jersey stepped in to put a stop to financially crippling payday loan structures. However, it is important to note that it’s not the practice of payday loan lending per-say that has been prohibited. By this, we mean that short-term loans are still in existence, with some lenders asking you to repay the loan funds when you next get paid.
Crucially, it is the amount of interest that lenders can charge that has been legislated. This still stands at 30% APR, meaning that lenders charging more than this are doing so illegally. Moreover, lenders need to be in possession of a state-issued lending license to facilitate short-term loans. Any lenders that fail to meet these two key regulations are doing so illegally.
The one exception to the rule applies to Tribal loan providers. Tribal Loan providers operate under their own laws, which are not required to comply with state lending regulations. Due to the special status that Tribal loan providers hold, they operate much like many pre-2006 payday loan lenders. As such, interest rates are still sky-high and the eligibility threshold is super-low.
Best New Jersey Alternatives to Payday Loans in 2020
Alternatives to Payday Loans in New Jersey
Payday loans were prohibited in 2006, meaning that the most a lender can charge you in the state is 30% APR – unless as stated it’s a Tribal loan provider. On the one hand, this is great news for you as the borrower, as you should never be forced to pay triple-digit interest rates again. However, this also means that your financing options are going to be somewhat limited – especially if it’s only for a few hundred dollars.
Nevertheless, we’ve listed the main alternatives to online payday loans in New Jersey below.
Short-Term Loans in New Jersey
The best alternative available to you in New Jersey is likely to be a short-term personal loan. These are loans that typically come with a term of between 3 months and 1 year. However, some short-term loan providers will allow you to repay the funds when you next get paid. Sound familiar?
Crucially, a number of short-term loans in New Jersey operate largely the same as a conventional payday loan, meaning you only borrow the funds until you next receive your salary. With that being said, short-term loans also give you the option of repaying the loan funds over a number of months, so this option might suit you if you need more time to pay.
In terms of the fundamentals, most short-term loans in New Jersey can be applied for online. If your application is approved instantly, you might be able to get your hands on the loan the same working day. Most importantly, the most that you can pay on a short-term loan is 30% APR, meaning that the loan won’t result in huge interest charges.
Pros and Cons of Short-Term Loans in New Jersey
Tribal Loans in New Jersey
As we noted earlier in our guide, companies that are controlled by Tribal Indians are not required to comply with state lending laws. Instead, they abide by their own codes of practice, which can be somewhat problematic if you fall behind on your repayments. This is because Tribal loan providers have much more flexibility in what they charge in interest, as well as in late payment fees.
With that being said, Tribal loans should be a last resort option. You might find yourself using one because you’ve been turned away from other lenders in New Jersey – which is typically a result of having a less than ideal credit profile. If this does sound like you, Tribal lenders in the state are known to accept applications from all walks of life.
This goes as far as approving loans to those without a full-time income, or a FICO score that sites within the ‘bad’ threshold. In terms of the positives, most Tribal loan providers in New Jersey allow you to complete the end-to-end application process online. This includes applying for the loan itself, reviewing your loan terms, and then signing the digital loan agreement.
If approved on the spot, Tribal loan companies are often able to transfer the loan funds into your bank account later in the day. When it comes to repayment, you’ll likely need to settle the debt when you next get paid. Failure to do so could result in ever-growing late payment charges, which can be hard to get out of – not least because state lending laws do not apply.
Pros and Cons of Tribal Loans in New Jersey
Auto Title Loans in New Jersey
Often overlooked by consumers in New Jersey, it might be worth considering the merits of an auto title loan. These are loan companies that approve applicants in return for putting your car or motorbike up as collateral. The process can still be completed 100% from the comfort of your own home, and most platforms allow you to assess the value of your vehicle in a matter of seconds.
All you need to do is enter your vehicle registration number, and the New Jersey lender will let you know how much you can borrow. Auto title loan companies operating in New Jersey offer you a number of benefits over Tribal lenders. First and foremost, you stand the chance of keeping your interest payments within the 30% APR limit. This is in stark contrast to Tribal companies, who are known to charge well beyond the state limits.
Moreover, auto title loans are suited for those of you that have been turned away from other lenders in New Jersey. This is because the auto title loan firm will consider all credit profiles, as they know that they have your car or motorbike as collateral in the event that you fall behind on the loan. In order to qualify for an auto title loan in New Jersey, your name needs to be on the logbook.
Pros and Cons of Auto Title Loans in New Jersey
Am I Eligible for a Loan in New Jersey?
As is the case in all US states, the specific eligibility requirements in New Jersey will vary from lender-to-lender. For example, if you’ve got an excellent credit rating and have a track record of always meeting your debt repayments on time, then you’ll likely be eligible for all loan types – and benefit from the best APR rates in the market. At the other end of the spectrum, if you’ve got a bad credit profile and have defaulted on loans in the past – you might be forced to use a Tribal loan company.
Nevertheless, we’ve listed the main requirements that lenders in New Jersey typically ask for to be eligible for finance.
- Regular Source of Income: Most loan providers will require you to have a regular source of income
- Minimum FICO Score: Some New Jersey lenders will have a minimum FICO score requirement
- New Jersey Resident: All loan applicants must be a resident of New Jersey.
- 18 Years or Older: You also need to be aged at least 18 years old to get a loan in New Jersey
How can I get a Loan in New Jersey Today?
Are you based in New Jersey and looking for fast funding today? If so, follow the quickfire guidelines outlined below.
Step 1: Choose a New Jersey Online Lender
Your first port of call will be to choose an online lender that offers your preferred loan type. For example, if you’re looking to obtain a loan that allows you to repay the funds over a number of months, then you might be best off using a short-term lender operating in the state.
You also need to perform some due diligence on the types of interest rates that the lender charges. In an ideal world, the New Jersey loan provider will allow you to check your eligibility on a soft credit check basis. This means that irrespective of whether or not you are eligible, the initial application won’t be posted to your credit file.
Step 2: Apply Online
Once you have chosen a suitable New Jersey lender that has an online presence, you will then need to complete the application process. You normally need to state how much you want to borrow and for how long, before proceeding to the main application page. Once you do, you will be asked to enter a range of information linked to your identity and financial standing.
- First and Last Name
- Home Address
- Date of Birth
- State ID Number
- Contact Details
- Income After-Tax
- Name and Address of Employer
- How Long You Have Lived at Current Address
Step 3: Review Loan Terms
Once you have submitted your application, the New Jersey lender will then cross-reference the information with third-party sources. Unless you are using a Tribal lender, this is likely to consist of a credit check with the main three credit bureaus. If your application is successful, the lender will then display your pre-approval rates.
This covers the amount of interest that you’ll pay on the loan and what your weekly/monthly repayments will amount to. If you’re happy to proceed, the lender will then ask for your bank account details.
Step 4: Bank Details and Digital Loan Agreement
Most online lenders in New Jersey will transfer your loan funds directly into your bank account. In rarer cases, you might be required to collect the funds in person from your local branch. Even if its the latter, you will still need to enter your checking account details, as this is the method that the lender is likely to collect your repayments.
To complete the loan application process, you will then be required to sign a digital loan agreement. Once you do, the lender will proceed to transfer your loan funds – potentially later that day.
In summary, although payday loans in New Jersey have been outlawed since 2006, there are several alternative loan types available in the state. For example, if you’re looking to repay the funds over a number of months, short-term loans are perfectly legal. Alternatively, if you’re credit is less than ideal but you want to benefit from competitive interest rates, it might be worth considering an auto title loan.
However, it is important to note that Tribal lenders are also popular in New Jersey, as they are happy to approve loans for those with extremely bad credit and low incomes. In return, such lenders charge super-high interest rates that exceed the 30% New Jersey limit. They are able to do this because Tribal loan companies are not required to abide by state lending laws. As such, never take out a loan in New Jersey unless you are confident you’ll be able to meet your weekly or monthly repayments.
Can I apply for a payday loan online if I live in New Jersey?
Although payday loans were outlawed in 2006 - Tribal loan companies operating in the state are not impacted by the ban. This is because Tribal lenders operate under their own codes of practice, as opposed to state lending laws. As such, you can still obtain a payday loan-style financing product if the lender is owned by Tribal Indians.
Is it safe to use a Tribal payday loan company in New Jersey?
On the one hand, if you always meet your weekly or monthly repayments and never fall behind on the debt - then Tribal lenders in New Jersey are perfectly safe. However, if you do fall behind on the loan, Tribal companies can effectively charge what they want in late payment fees, as they are not restricted by state lending laws.
How quickly can I get a loan in New Jersey?
’Some lenders allow you to complete the application process in less than 10 minutes. If you're electronically approved, you could receive the loan funds later in the day.
Do I need to supply supporting documents when applying for a loan in New Jersey?
If the New Jersey lender is unable to verify your information through its third-party checks, then it might ask you to upload supporting documents. This might be a recent payslip to verify your income or a bank statement to prove you are the owner of your checking account.