If you apply for a payday loan (either a faxless payday loan, or a loan at a storefront), you will receive a loan agreement for you to review and sign. The agreement needs to be clear and understandable (but what lawyer writes clearly?).
Payday lenders are required by the Truth in Lending Act (TILA) — which is a U.S. Federal Law — to provide clear disclosure and notice of the terms of a loan agreement. The TILA requires that payday lenders clearly tell you the loan costs, interest rate, and due dates.
The purpose of TILA is to promote the informed use of consumer credit (including payday loans) requiring disclosures about its terms, cost to standardize the manner in which costs associated with borrowing are calculated and disclosed. The law does does not tell lenders how much they can charge. It simply tells them to disclose the terms clearly so you can understand what you are getting into.
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