If I Live in Michigan, Can I Apply for a Payday Loan in Wisconsin?
Wisconsin & Michigan Laws
- As of December 2010, no laws prevent Michigan residents from applying for loans from lenders in Wisconsin. Although the payday loan industry is heavily regulated in both states, neither state has passed laws limiting who is allowed to apply for loans. In general, few laws prevent individuals from seeking loans from lenders located out of state. For example, a large percentage of credit cards are issued by companies located in Delaware, mainly to out-of-state borrowers.
- When an individual borrows money from a lender located in another state, the laws governing the transaction are those of the state in which the loan was issued, not in which the borrower resides. So, if a person living in Michigan applied for and received a loan from a lender in Wisconsin, it would be Wisconsin's payday loan laws that regulated how much interest the company could charge and the size of fees that could be assessed.
- While a person in Michigan can legally apply for a loan from a payday loan company in Wisconsin, this does not mean that the payday loan company will choose to lend to this person. If the loan becomes delinquent, the payday lender will have to abide by the collection laws of the state in which the borrower lives. The lender may consider it inconvenient to collect debts from out-of-state residents, and thereby may choose to not lend to non-locals.
- While a Michigan resident who applies in person for a loan in Wisconsin will have to abide by Wisconsin's payday loan laws, the same is not true of a Michigan resident solicited on the Internet or through mail by a Wisconsin-based payday loan company. Generally, online payday loan companies must abide by the laws of the state in which the borrower resides, regardless of where the payday loan company has its physical headquarters.