Licensed Lenders in Delaware are required to cap short-term installment loans at $1,000. These loans of less than 60 days are “not secured by the title to a motor vehicle.” However, the state does not regulate APRs. Finalized rates are negotiable and determined by the lender and the borrower.
In 2012, Delaware’s state legislature passed House Bill 289, which increased the limit on short-term loans from $500 to $1,000. To protect consumers from falling into a cycle of debt, the bill also restricts borrowers from taking out more than 5 loans over a 12-month period.
Before issuance, licensed lenders are also required to search Delaware’s Consumer Loan Database to assess:
If the screen is passed and a borrower is eligible for a loan, licensed lenders are also required to:
Also, licensed lenders need to update the database when a loan is paid in full or if a borrower defaults.