Best Loans In Connecticut, Payday, Auto Title Laws 2019
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Best Loans In Connecticut, Payday, Auto Title Laws 2019

EPF August 12, 2019
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Connecticut’s usury law puts a 12% APR-cap on all non-regulated loans. However, lenders registered with Connecticut’s Department of Banking (DOB) can levy APRs upwards of 36% for loans up to $15,000. These include licensed banks, credit unions and pawnbrokers.

For open-ended loans, licensed lenders can charge up to 19.8%

For closed-end loans, licensed lenders can charge:

  • $17 per $100 on the first $600
  • $11 per $100 on any excess from $601 to $1,800 for unsecured loans and loans secured by credit life insurance
  • $11 per $100 on all secured loans > $1,800

Connecticut’s check casher law also stipulates that licensed businesses cannot charge more than 2% for cashing a check.

Best Bad Credit Loans In Connecticut

Lender:Min Credit Score:Loan Amount:APR:Licensed in Connecticut:
BadCreditLoans0$500 – $5,0005.99% – 35.99%Not a direct lender
CashUSA0$500 – $5,0005.99% – 35.99%Not a direct lender
PersonalLoans580$1,000 – $35,0005.99% – 35.99%Not a direct lender

For a complete list of reputable lenders, see our  guide on bad credit loans.

Best Personal Loans for Good Credit In Connecticut

Lender:Min Credit Score:Loan Amount:APR:Licensed in Connecticut:
Payoff640$5,000 – $35,0005.99% – 24.99%Yes
Upstart620$1,000 – $50,0007.46% – 35.99%Yes
Upgrade620$1,000 – $50,0007.99% – 35.97%No, but complies with law
PersonalLoans580$1,000 – $35,0005.99% – 35.99%Not a direct lender
LendingTree500$1,000 – $35,0003.99% – 35.99%Yes

If you need more help, see our list of recommended lenders. You can also try SuperMoney. They are one of the best loan comparison sites.

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Payday Loans in Connecticut

Payday loans are prohibited in Connecticut.

And while not explicitly illegal, the APR caps above make the practice highly unprofitable. Connecticut’s small loan law also prohibits the use of wages as collateral for a loan. And while it’s a grey area, the structure of payday loans is quite similar.

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Car Title Loans in Connecticut

Car title loans are legal in Connecticut.

However, their APRs are also capped:

  • For new cars, the maximum APR a lender can charge is 15%
  • For used cars < 2 years old, the maximum APR a lender can charge is 17%
  • For used cards ≥ 2 years old, the maximum APR a lender can charge is 19%

Credit Unions In Connecticut

Name:APR:Amount:
Connecticut State Employees Credit Union7.9% – 12.9%Up to $15,000
Connex Credit Union6.99%+Up to $20,000

Connecticut State Employees Credit Union

The Connecticut State Employees Credit Union offers personal loans to all employees and retirees of the state of Connecticut. Immediate family members are also eligible for services.

  • Personal Loans come with fixed APRs of 12.9%. You can borrow upwards of $15,000 and repayment terms reach upwards of 60 months. As well, all loans are unsecured so no collateral is required.
  • Vacation Loans also allow you to borrow up to $15,000, but APRs are set at 7.9%. Repayment terms are stretched over a 1-year term.
  • Share Secured Loans use your CSE savings account as collateral. Your APR is the dividend rate + 2%. You can borrow up to the full balance of your account and the loan is eligible for renewal.
  • Share Certificate Loans are similar to Share Secured Loans, only a certificate of deposit (CD) is used as collateral. Your APR is the dividend rate + 2%, but you can only borrow up to 70% of your CD’s value. As well, you must repay the loan when your CD matures.

CSE operates 7 branches across Connecticut, with locations in Hartford, New Haven, Norwich, Southbury as well as others.

Connex Credit Union

With a Connex Credit Union Personal/Signature Loan, you can borrow up to $20,000 and APRs are as low as 6.99%. Terms extend up to 60 months and loans can be used to consolidate credit card debt, pay off holiday bills, pay your taxes, buy gifts for special occasions, take a family vacation as well as many other purposes.

Connex Credit Union operates 8 branches across Connecticut, with locations in North Haven, Branford, Guilford, Hamden as well as others.

Student Loans In Connecticut

Connecticut Higher Education Trust (CHET)

The CHET Program is a 529 savings plan that allows your money to grow tax-free. It takes about 15 minutes to set up and offers a variety of low-cost investment options. Funds are exempt from federal and state income tax and you also receive an income tax deduction for all contributions.

Best of all, you can withdraw up to $10,000 per year tax-free. As long as the funds are used for “qualified higher education expenses” like tuition, books, supplies, computers, room and board etc. you can access your savings worry-free. As well, the proceeds can be used at most accredited colleges and universities across the United States and even some institutions abroad.

Roberta B. Willis Merit Scholarship Program

The scholarship program is open to Connecticut high school seniors and graduates who have a junior year class rank of 20% or higher and an SAT score of at least 1200 or ACT score of at least 25. The beneficiary also has to attend a Connecticut public or non-profit private college.

Amounts include:

  • Up to $5,250 per year for full-time students in a 4-year program
  • Up to $4,650 per year for full-time students in a 2-year program

To apply, visit your high school guidance office. The deadline is February 15 of each year.

For students in need of financial aid, you can also apply for the Need-Based grant. When enrolled full-time in a 2 or 4-year program, you can receive up to $4,500 per year. To apply, contact your college’s financial aid office.

Federal Housing Administration (FHA) Loans In Connecticut

Like other U.S. states, FHA loan limits in Connecticut vary by county. Fairfield offers the highest loan amount at $1,156,650, while New Haven and New London offer the lowest loan amount at $314,827.

County:Lowest FHA Loan Amount:Highest FHA Loan Amount:
New Haven County$314,827$605,525
New London County$314,827$605,525
Windham County$327,750$630,300
Hartford County$353,050$678,950
Middlesex County$353,050$678,950
Tolland County$353,050$678,950
Litchfield County$357,650$687,800
Fairfield County$601,450$1,156,650

Business Loans in Connecticut

If you’re looking for convenience, these online lenders offer great service and affordable rates:

Lender:Min Credit Score:Loan Amount:APR:Licensed in Connecticut:
LendingClub630Up to $500,0009.77% – 35.98%Yes
LendingTree500Varies5.99% – 35.99%Yes
Kabbage0Up to $250,00024% – 99%Not a direct lender

If you prefer to deal with a local lender in Connecticut, consider the options below:

The Community Economic Development Fund (CEDF)

The CEDF is a non-profit organization that provides loans and lines of credit to small businesses in low-to-moderate income areas of Connecticut.

The organization works with:

  • Borrowers who have low credit scores
  • Borrowers with limited collateral
  • Borrowers who don’t qualify for bank loans

The CEDF has three loan options to choose from:

  • A CEDF Term Loan provides funding for equipment, inventory, working capital and debt refinancing. For loans with terms up to 6 years, you can borrow anywhere from $1,000 to $50,000. For loans with terms up to 10 years, you can borrow anywhere from $5,000 to $250,000. APRs are fixed, but they vary by borrower.
  • A CEDF Commercial Real Estate Loan provides up to $500,000 for the purchase of owner-occupied commercial property. Terms extend up to 20 years, but fixed APRs vary by borrower.
  • A CEDF Line of Credit provides anywhere from $5,000 to $250,000 to help with cyclical or seasonal cash flow needs. Terms are renewable after one year and APRs are variable.

To contact the CEDF, you can call them toll-free at 1-888-835-2333 or you can fill out the form on their website.

The Community Investment Corporation (CIC)

The CIC offers small business loans to entrepreneurs in Connecticut and Rhode Island. The organization has helped create more than 700 jobs in Connecticut over the last four years.

Its Community Advantage Loan is made for start-ups and includes consulting services to help entrepreneurs succeed. You can borrow up to $150,000 ($250,000 in certain cases) and variable APRs are set as the Wall Street Journal Prime Rate + 2% to 6%.

Loan terms are:

  • 7-10 years for working capital, acquisitions, renovations and start-up expenses
  • Up to 25 years for real estate

As a secondary product, CIC’s Microloans allow you to borrow up to $50,000 for standard businesses and up to $25,000 for childcare businesses.

Funds can be used for:

  • Equipment
  • Working capital
  • Insurance
  • Marketing
  • Inventory (except for childcare businesses)

Conclusion

Connecticut’s 12% APR-cap on non-regulated loans keeps payday lenders from operating in the state. And while it’s not explicitly outlawed, payday lenders find it unprofitable to conduct business in Connecticut. Car title loans face a similar issue. While not illegal, the rate caps make their APRs similar to personal loans. And though using your car as collateral is a risky endeavour, the option is affordable if needed.

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