State Laws and Payday Loans 2016
Payday loans can be a risky venture to those who do not understand them. As a result, many states have strict payday loan regulations to help protect consumers. The laws change regularly, so before agreeing to a payday loan, check with your state to make sure the lender is following current laws. If you're offered a loan that doesn't follow the laws, the loan is illegal. The National Conference of State Legislatures (NCSL.org) keeps a list of the current laws.
States that Currently Regulate Payday Loans
- Alabama – $500 with loan terms of 10 to 31 days. Cannot exceed 17.5%.
- Alaska – $500 with a maximum term of 14 days. Cannot exceed $15 per every $100 loaned or 15%, whichever is lower.
- California – $300 with a loan term of no more than 31 days. Cannot exceed 15%.
- Colorado – $500 with a minimum loan term of six months. Interest cannot exceed 20%. Monthly maintenance fees of $7.50 or less per $100 are allowed.
- Delaware – $500 with loan length of no more than 60 days. No cap on fees.
- Florida – $500 with loan terms ranging from 7 to 31 days. Cannot exceed 10%.
- Hawaii – $600 for no more than 32 days. Cannot exceed 15%.
- Idaho – $1,000 with no restrictions on fees or loan lengths.
- Illinois – Smaller of $1,000 or 25% of a consumer's gross monthly income for 13 days to 120 days. Cannot exceed 15%.
- Indiana – $50 and $550 for no less than 14 days. Cannot be more than 15% for loans of up to $250, 13% on loans between $251 and $400, and 10% on loans of $401 to $500.
- Iowa –$500 for no more than 31 days. Fees are 15% on the first $100 and then 10% after that.
- Kansas – $500 for 7 to 30 days. Cannot be higher than 15%, and a 3% maintenance fee is allowed.
- Kentucky – No more than two payday loans out at any time totaling $500 for 60 days or less. No more than 15%.
- Louisiana –$350 for no more than 30 days. Cannot exceed 16.75%.
- Michigan – $600 for no more than 31 days. No more than 15% on the first $1 to $100, 14% on $101 to $200, 13% on $201 to $300, 12% on $301 to $400, 11% on $401 to $600.
- Minnesota – $350 for no more than 30 days. Loans up to $50 have a fee of no more than 10.5%; $51 to $100 fees cannot top 10%; $100 to $250 fees are 7% plus a $5 processing fee; $251 or more, 6% plus a $5 processing fee.
- Mississippi – $500 for no more than 30 days. Cannot exceed 3% for federal or state government checks. Cannot exceed 10% with personal checks.
- Missouri – $500 with loan terms of 14 to 31 days. Cannot exceed more than 75% of the original loan value.
- Montana – Between $50 and $300. There is no loan length, fees cannot exceed more than 36%.
- Nebraska – $500 for no more than 34 days. Cannot exceed 15%.
- Nevada – No more than 25% of the consumers gross monthly income. No restriction on fees.
- New Hampshire – $500 with payment terms of 7 to 30 days. Charges cannot exceed 36%.
- New Mexico – No more than 25% of a consumers gross monthly income for between 14 and 35 days. Cannot exceed 15%.
- North Dakota – $500 per transaction with no more than $600 to any consumer for 60 days. Cannot exceed 20%.
- Ohio – $500 for least 31 days. Cannot exceed 28%.
- Oklahoma – $500 for 12 and 45 days.Cannot exceed 15% on the first $300 and 10% on $301 or more.
- Oregon – No maximum loan amount, but terms must be between 31 and 60 days. Cannot exceed 36% with a processing fee of no more than $10.
- Rhode Island – $500 for 13 days or longer. Processing fees cannot be more than $5, and interest must be no more than 10%.
- South Carolina – $550 with loan terms of no more than 31 days. Cannot exceed more than 15%.
- South Dakota – Maximum loan value of $500, otherwise no restrictions.
- Tennessee – $500 for no more than 31 days. Cannot exceed more than 15%.
- Texas – Loan cannot be less than seven days. No limits on amount, interest, or fees, but there are breaks for military members.
- Utah – No maximum loan amount, but it cannot last more than 12 weeks. No restriction on interest charges.
- Virginia – $500. Interest cannot exceed 35% and any origination or processing fees cannot exceed more than 20% of the loan amount.
- Washington – Cannot exceed 30% of the gross monthly income or $700, whichever is lower. Repayment date must be one day after the consumer's payday. Fees cannot be more than 15% on the first $500, and 10% after that.
- Wisconsin – No restrictions on the size of loan or repayment terms. No cap on interest.
- Wyoming – No restrictions on the size of the loan, but repayment must be no more than one month. Cannot exceed 20% or $30, whichever is larger.
States Without Specific Payday Loan Regulations
In Connecticut, Maryland, Massachusetts, and West Virginia, payday loans are legal as long as small loan or usury laws are followed.
In Maine, New Jersey, New York, Pennsylvania, and Vermont there are no current restrictions.
States that Ban Payday Loans
Some states ban payday loans altogether to make sure consumers don't fall into a cycle of being unable to afford or pay back the loan. Those states are:
- North Carolina
- Washington D.C.