Interest

• In Pennsylvania, a lender cannot charge a borrower an interest rate of more than 20 percent on the first $300 that a borrower loans out. For any amount after that, the lender can only charge 7.5 percent. In addition, the maximum loan a person can have out at any one time is $400. If a person renews a loan, then the interest rate on the first $300 increases to 30 percent.
  
  

Fees

• One of the ways that payday loan companies make money is by charging individuals fees. These fees can be applied to the original loan and in a number of different ways if the individual is delinquent paying back the loan. For example, the company may apply a fee if the individual's repayment check bounces or if the individual does not make make the required payment on time. However, in Pennsylvania, a person can only face $75 worth of fees at a single time.
  
  

Collection Actions

• If a person defaults on a payday loan in Pennsylvania, he can expect to face many of the same collection actions that he would face in other states. For example, the company may hire a collection agency. This collection agency may limit its collection actions to contacting the borrower and requesting payment. However, it may also file a civil suit against the individual and seek a garnishment of his wages or a freezing of his bank account.
  
  

Criminal Charges

• Some payday lenders attempt to bring criminal charges against an individual who has defaulted on a debt. Generally, the lender will charge that the debtor engaged in fraud when he provided a check for repayment that did not clear. Under Pennsylvania law, payday lenders cannot seek criminal charges against a borrower simply for failing to pay back a loan, even if his check bounces.