Licensed payday loans are required in all but three states for all stores that give cash advances. This is required so that states can keep track of all the transactions going on between the people and company. The three states that do not require licenses have payday company’s acting as credit service organizations, and they are; Florida, Texas and Maryland.

Laws for credit service organizations and payday loans are completely different. If you are a resident of Florida, Texas or Maryland then it would be wise to completely check out every company you wish to take a loan out from before applying. In every state credit service organizations are legal, but only in the above three are known payday lenders acting as credit service organizations. Also, credit service organizations don’t have to be licensed in those states either.

There are huge differences in licensed payday loans vs. unlicensed payday loans. If you receive funds from an unlicensed source you may be charged hundreds of dollars in interest due to high interest rates. Not to mention be breaking the law in the state you reside in. While it is unheard of for people to be arrested for taking out a payday loan, there could be legal action filed against the company and fines to be paid. There are several different ways you can ensure that you are obtaining a loan from a properly licensed payday agency.

Online payday loans that have offices in your state will have license information posted, or readily available to be shown to you. If there is hesitation in providing proper proof of licensure in your state then you don’t want to take out a loan from that company. It takes a lot of digging to find out if individual online companies are licensed in your state. Often these companies can have different names for their main license to practice.