Officials offer pros, cons of payday lending reform

The focus is House Bill 545, which was the result of months of deliberations that included standing-room-only committee hearings and Statehouse protests.

Under the former section of Ohio Revised Code, check-cashing lenders could provide loans of $800 or less. They could not make new loans to customers who had outstanding ones, and they could charge interest plus additional origination and other fees, according to the state's Legislative Service commission.

Combined, proponents of the law change say the resulting costs equaled an annual percentage rate close to 400 percent.

Under HB 545, the maximum loan amount would be capped at $500, with repayment terms of at least 30 days. The annual percentage rate charged for such loans would be capped at 28 percent, with no provision for origination fees.

The bill also limits borrowers to four payday loans per year, prohibits them from taking out a new loan to pay off an old one, and requires consumer education courses for those who take out two loans within a three-month period.

Beginner's guide to: Personal loans

How do I get a personal loan?

The easiest way is to approach the lender directly. Most have application forms you can fill out on the web. If you don't have internet access, you can go to your local bank.

How do I know who offers the best rates?

Comparison sites such as moneysupermarket.com and moneyfacts.co.uk allow you to search for the best deals, or look at the tables on this page. Be aware that the rates usually quoted in newspapers are for loans of £5,000, or even £10,000. If you want to borrow less, the rates will be higher.

What is the "APR"?

APR – annual percentage rate – is a standardised way of calculating a loan's interest rate. But beware; the advertised rate may not be what you get. If it is advertised as the "typical APR", it must be offered to at least two-thirds of successful applicants. But one-third of loans could be offered at a higher rate.