Are you currently based in Ohio and need access to fast emergency funding? If so, payday loan lenders are now prohibited in the state, so you’ll need to look at other options. With that being said, there are still lots of lenders that accept short-term loan applications from those based in Ohio, so it’s well worth exploring what’s available.
This can come in the form of a short-term loan of between 3-12 months, or depending on how much you need – a personal loan of one-year or more. Alternatively, you might need to consider a Tribal lender if you only need the funds for a few weeks, as such providers are not legally obliged to follow state lending laws.
In this article, we cover the ins and outs of what your financing options are in Ohio, how much you can borrow, what sort of interest rates you should expect, and more.
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Why are Payday Loans Banned in Ohio?
Payday loan lenders are a highly controversial topic in the US. Not only do they typically target their financing products to those with bad credit and low incomes, but the interest attached to such loans are often sky-high. As a result, a number of US states – including that of Ohio, have since banned the practice of issuing payday loans.
Ohio itself banned such loans during the midst of the financial crisis in 2008 – where cash-strapped locals were using online payday loan lenders in their droves. Although this solved a short-term cash-flow crisis, these loans came with an average APR rate of 400%. In some cases, the interest exceeded 1,000% APR.
When state regulators eventually stepped in, it wasn’t payday loans per-say that were banned. On the contrary, the ban relates the amount of interest that lenders can charge on short-term loans. At the time of writing, this stands at a maximum APR of 28% per year. With that being said, the state ban on payday loans in Ohio did not stop lenders from offering their high-interest services.
Instead, locals are now using Tribal lenders. These are loan providers that are operated by the Native American community from tribal grounds and are subject to seperate rules – as opposed to state lending regulations. As such, this allows loan companies to bypass the 28% APR rule. In another workaround, a number of lenders operating in Ohio have found alternative ways to breach the 28% rule. For example, they’ll package loans with highly expensive origination fees – which is marketed as a fee to cover the costs of “arranging the loan”.
Best Ohio Alternatives to Payday Loans
Alternatives to Payday Loans in Ohio
Although payday loans are technically banned in Ohio, it’s still possible to obtain short-term financing. The specific option that you go with will depend on a number of factors. For example, if your financial standing is less than ideal, you might be forced to use a specialist bad credit lender.
This will likely need to come in the form of a Tribal lender, which are payday loan companies in all but name. At the other end of the spectrum, short-term loans are also an option, as you’ll get longer to repay the money.
Breakdown of short term lending options in Ohio:
Tribal Loans in Ohio
The closest thing to a payday loan in Ohio is going to be that of a Tribal loan. These are loans issued and underwritten by those that fall under the legal remit of Tribal laws. If they do, such providers can operate under their own codes of practice, as opposed to state lending laws.
Much of the loan process mirrors that of a traditional same day payday loan. For example, you can usually complete the entire application process online, and approved applications are typically funded on the very same day. Moreover, you will often be asked to repay the loan funds when you next receive your salary.
However, the key difference between a Tribal loan with that of a conventional online payday loan of the past is that the annual interest cap does not apply. Instead, Tribal loan providers have much more flexibility in what they charge you. Crucially, such lenders still need to comply with federal lending laws.
This means that the lender must abide by the loan agreement that you signed and entered into. As such, any respective fines or charges for late payments must be stated within the loan agreement. Finally, it is important to note that Tribal loans are usually targeted to those looking for a bad credit loan. In fact, some even operate no credit check loans, so most credit profiles will be considered.
Pros and Cons of Tribal Loans in Ohio
- Very similar to conventional payday loans
- The application process can usually be completed online
- Suitable for those with poor or bad credit
- Funded often executed on a same-day basis
- Some lenders do not run credit checks
- Flexibility on repayment terms
- All loans are unsecured
- Does not need to abide by state lending laws
- Interest rates are often sky-high
- Targets those with damaged credit and low incomes
- Often hide behind shell companies
Personal Loans in Ohio
The second financing option that you have at your disposal is that of an Ohio personal loan. These are traditional instalment loans that allow you to repay the money over a number of years. In most cases, the minimum term available on a personal loan is one year, so you will be given much longer to settle the debt in comparison to a Tribal loan.
Furthermore, personal loans are normally for much higher amounts, with some lenders stipulating a minimum loan size of $1,000 – sometimes more. As such, if you’re only looking to borrow a few hundred dollars, you might need to consider an alternative option.
With that being said, personal loans typically come with much lower interest rates than that of a Tribal loan. However, this will ultimately depend on what your financial profile is like. For example, if you’re in possession of a good or excellent credit score, then you’ll benefit from some highly competitive rates. On the contrary, if your credit profile is damaged – or you’ve got a history of falling behind on your debts – then expect a much higher interest rate.
Pros and Cons of Personal Loans in Ohio
- Complete the entire application online
- Interest rates are usually much lower than Tribal loans
- Suitable for all credit profiles
- Funds usually transferred within 1-2 working days
- Loans are unsecured
- Repay the funds over a number of years
- Not suitable for short-term financing – minimum term of 1 year+
- You’ll likely pay an origination fee
- The best rates are reserved for good or excellent credit scores
Auto Title Loans in Ohio
A further option that is well worth considering is that of an auto title loan in Ohio. These are loan companies that issue financing in return for you putting your car or motorbike up as collateral. In most cases, the loan amount will be based on the current market value of your car. For example, if the Ohio lender allows you to borrow 75% LTV (Loan-to-Value), and your car is worth $5,000, then you would be able to borrow up to $3,750.
Auto title loans in Ohio come with both good and bad points. For example, they are ideal if you have a bad credit profile and you’ve subsequently been turned away from other lenders in the state. This is because auto title lenders have the comfort of your vehicle as security. As such, if you were ever to fall behind on your loan, the lender would have the legal remit to seize the car.
Auto title loans give you the chance to reduce your overall interest payments. As lenders have the safety net of your car or motorbike, they’ll be more inclined to offer you a competitive rate of interest.
Pros and Cons of Auto Title Loans in Ohio
- Perfect for credit profiles of all shapes and sizes
- Borrow an amount proportionate to the value of your car or motorbike
- No need for the lender to keep the car – use it as normal
- Funds transferred within 1-2 working days
- Reduce your interest payments through a secured loan
- Get an instant quote by entering your vehicle registration number
- You can have your vehicle repossessed if you default on the loan
- The car valuation might be less than you had hoped for
Am I Eligible for a Loan in Ohio?
The eligibility requirements for financing in Ohio can vary quite considering depend on the type of loan, and the lender in question. For example, while personal loans are best suited for those of you with a healthy credit profile, Tribal loan providers will consider applicants from all walks of life.
Nevertheless, we’ve listed the main requirements that lenders in Ohio typically ask for to be eligible for financing.
- Regular Source of Income: You’ll need to have an income of some sort to be approved for a loan in Ohio.
- Minimum FICO Score: Some lenders will stipulate a minimum FICO score to be eligible.
- Ohio Resident: All loan applicants must be a resident of Ohio. You might need to prove this via state ID.
- 18 Years or Older: You also need to be aged at least 18 years old to get a loan in Ohio
How can I get a Loan in Ohio Today?
Are you based in Ohio and looking for fast funding today? If so, follow the quickfire guidelines outlined below.
Step 1: Choose an Ohio Online Lender
First and foremost, you’ll need to choose a lender based in Ohio that has an online presence. This needs to be a lender that meets your financing needs. For example, how much does the lender offer in loans, and how long can you borrow the funds for.
Check to see if the lender lists a representative rate so that you can gauge the type of interest you’ll be charged. Finally, explore how quickly the lender distributes loan funds, and whether or not you will be required to upload any supporting documents.
Step 2: Apply Online
Once you have found a suitable lender, you’ll then need to go through the online application process. Initially, you’ll need to enter the amount that you wish to borrow and for how long. Next, the lender will ask you some questions about your personal and financial situation – such as the following:
- 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
If your loan application was approved by the Ohio lender, you’ll then be presented with your pre-approval terms. This will include the amount of interest that the lender wants to charge you, whether or not an origination fee is required, and what your weekly or monthly repayments will amount to.
Step 4: Bank Details and Digital Loan Agreement
If you’re happy with the terms offered, you’ll need to enter your bank account details. This is where the lender will deposit your loan funds. In terms of repaying the money, this will likely be debited from the same bank account. Finally, you’ll need to read and sign a digital loan agreement.
This is the last point in which you can cancel the application, so make sure you read through it thoroughly. If everything looks OK – sign the form. Depending on the loan type, you should receive the loan funds within 0-2 days.
In summary, financing products packaged as payday loans have been outlawed since 2008 in the state of Ohio. However, it’s not payday loans per-say that are prohibited. On the contrary, it’s charging more than 28% APR in interest per year. While this saw many online payday loan companies leave the Ohio lending space, there are lots of alternative loan providers that are worth considering.
This includes the likes of Tribal loan companies, personal loans, short-term loans, and even auto title loans for those of you that own a car or motorbike. Ultimately, whichever loan type that you opt for, make sure that you are able to meet all of your weekly or monthly repayments. Failure to do so will lead to further financial difficulties, so tread with caution.
Can I apply for a payday loan online if I live in Ohio?
This depends on how you view a payday loan. For example, Ohio outlawed loan products that come with an interest rate of more than 28% in 2008. However, tribal loan companies do not need to abide by state lending laws, so they are effectively payday loan firms in all but name.
Is it safe to use a Tribal payday loan company in Ohio?
As long as you read through the digital loan agreement and you always make your repayments on time, you should have no issues with a Tribal loan company in Ohio. After all, such firms still need to comply with federal lending laws. However, if you miss a payment or worse - default on your loan, Tribal lenders are known to charge extortionate fees.
How quickly can I get a loan in Ohio?
’This depends on the type of loan and the amount you wish to borrow. For example, if opting for a short-term loan of a few hundred dollars, most providers can fund your account on a same-day basis. However, if you're borrowing a larger amount through a personal loan, it might take a few days to complete the application process.
Do I need to supply supporting documents when applying for a loan in Ohio?
When you apply for a loan online, the lender will attempt to cross-reference your data electronically. If it isn't able to, then it might ask you to upload supporting documents. This might include your Ohio state ID card, or a recent payslip to validate your income.