The Legal Status of Payday Loans in the USA

Update date 27.05.2024

A payday loan is an expensive short-term financial solution. Some lenders call it cash advance. Typically, a borrower repays it on their next payday. We recommend getting payday loans only to cover unexpected expenses and emergencies. Each state regulates payday lending to protect its residents from predatory lending. Payday loans amount, interest, and fees must not exceed the value under your state law.

States allow payday loans

Alabama

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Payday lending is regulated by the state of Alabama, and there are laws in place that govern the fees and interest rates that payday lenders can charge. Here are some of the key legal regulations on payday loans in Alabama:

Status: Legal

Maximum loan amount: $500

Loan term: 10-31 days

APR for 14-day $100 Loan: 456%

Maximum Finance Rate and Fees for every $100: 17.50%

Finance Charge for 14-day $100 Loan: $17.50

Alaska

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payday loan is a short-term loan that is usually taken out to cover unexpected expenses or bills that arise before a borrower's next paycheck. In Alaska, payday loans are regulated under the Alaska Statutes 06.50.010 et seq.

Status: Legal

Maximum loan amount: $500

Loan term: minimum 14 days

APR for 14-day $100 Loan: 521%

Maximum Finance Rate and Fees for every $100: 15%

Finance Charge for 14-day $100 Loan: $20

California

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The California Department of Business Oversight (DBO) regulates payday loans in California under the California Deferred Deposit Transaction Law (CDDTL). The CDDTL sets out regulations and requirements that payday lenders must follow to operate legally in the state:

Status: Legal

Maximum loan amount: $300

Loan term: maximum 31 days

APR for 14-day $100 Loan: 460%

Maximum Finance Rate and Fees for every $100: 15%

Finance Charge for 14-day $100 Loan: $17.65

Colorado

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Payday loans are legal in Colorado, but there are regulations in place to protect borrowers from predatory lending practices. These regulations are enforced by the Colorado Attorney General's Office and the Colorado Office of the Administrator of the Uniform Consumer Credit Code (UCCC):

Status: Legal

Maximum loan amount: $500

Loan term: minimum 180 days

APR for 14-day $100 Loan: 36%

Maximum Finance Rate and Fees for every $100: ?

Finance Charge for 14-day $100 Loan: $ ?

Delaware

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Payday loans are legal in Delaware. The maximum amount a borrower can borrow is $1,000 or 25% of their monthly income, whichever is lower:

Status: Legal

Maximum loan amount: $1000

Loan term: maximum 60 days

APR for 14-day $100 Loan: 521%

Maximum Finance Rate and Fees for every $100: not specified

Finance Charge for 14-day $100 Loan: not specified

Florida

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In Florida, payday loans are legal but are subject to regulations to protect borrowers from excessive fees and interest rates:

Status: Legal

Maximum loan amount: $500

Loan term: 7-31 days

APR for 14-day $100 Loan: 391%

Maximum Finance Rate and Fees for every $100: 

Finance Charge for 14-day $100 Loan: 10% for every $100 (plus verification fee not more than $5)

Hawaii

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Payday loans are considered "delayed deposit transactions" under Hawaii law, which legalized them in 1999. Interest rates on payday loans in Hawaii are capped at 24%:

Status: Legal

Maximum loan amount: $600

Loan term: maximum 32 days

APR for 14-day $100 Loan: 460%

Maximum Finance Rate and Fees for every $100: ?

Finance Charge for 14-day $100 Loan: 15% of the loan amount

Idaho

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Payday loans are legal in Idaho, but the Idaho Department of Finance regulates them. The Idaho Title 28, Chapter 46 of the Idaho Statutes provides the state's regulatory framework for payday loans. Here are some of the key regulations:

Status: Legal

Maximum loan amount: $1000

Loan term: not specified

APR for 14-day $100 Loan: 652%

Maximum Finance Rate and Fees for every $100: not specified

Finance Charge for 14-day $100 Loan: not specified

Illinois

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Payday loans are legal in Illinois, but they are regulated by the llinois Department of Financial and Professional Regulation. Here are some of the regulations that apply to payday lenders in Illinois:

Status: Legal

Maximum loan amount: $1000 or 25% of the gross monthly income, whichever is less

Loan term: from 13 days to 120 days

APR for 14-day $100 Loan: 36% including $1 loan verification fee

Maximum Finance Rate and Fees for every $100: 36%

Finance Charge for 14-day $100 Loan: ?

Indiana

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A payday loan in Indiana is a short-term, high-cost loan that is typically due on the borrower's next payday. Payday loans are regulated by the Indiana Department of Financial Institutions and governed by Indiana Code 24-4-4.5:

Status: Legal

Maximum loan amount: from $50 minimum to $605 maximum (and not in excess of 20% of of the gross monthly income)

Loan term: minimum 14 days

APR for 14-day $100 Loan: 391%

Maximum Finance Rate and Fees for every $100: ?

Finance Charge for 14-day $100 Loan: 10%, 13% or 15% depending on the loan amount

Iowa

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Payday loans in Iowa are regulated under the Iowa Division of Banking. The Iowa Payday Loan Law regulates payday lenders in the state and provides protections for borrowers:

Status: Legal

Maximum loan amount: $500

Loan term: maximum 31 days

APR for 14-day $100 Loan: 337%

Maximum Finance Rate and Fees for every $100: ?

Finance Charge for 14-day $100 Loan: maximum $15 for a loan up to $100 plus not more than $10 on subsequent $100

Kansas

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The state of Kansas has specific laws regulating payday loans. According to the Kansas Statutes Annotated Section 16a-2-404, payday loans are legal in Kansas. However, there are regulations in place to protect borrowers from predatory lending practices. Here are some of the key legal regulations regarding payday loans in Kansas:

Status: Legal

Maximum loan amount: $500

Loan term: 7-30 days

APR for 14-day $100 Loan: 391%

Maximum Finance Rate and Fees for every $100: ?

Finance Charge for 14-day $100 Loan: $15

Kentucky

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In Kentucky, payday loans are subject to ‌Statute Ann. 286.9-010 et seq. The loan providers should be officially licensed as check cashers:

Status: Legal

Maximum loan amount: $500

Loan term: 14-60 days

APR for 14-day $100 Loan: 417%

Maximum Finance Rate and Fees for every $100: ?

Finance Charge for 14-day $100 Loan: $16

Louisiana

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Payday loans are legal in Louisiana, but they are regulated by the Louisiana Office of Financial Institutions. Here are some of the key regulations that apply to payday loans in Louisiana:

Status: Legal

Maximum loan amount: $350

Loan term: maximum 60 days

APR for 14-day $100 Loan: 782%

Maximum Finance Rate and Fees for every $100: ?

Finance Charge for 14-day $100 Loan: $30

Maine

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Payday loans are legal in Maine, but the state has implemented several regulations to protect borrowers from excessive fees and interest rates. Here are some key regulations regarding payday loans in Maine:

Status: Legal

Maximum loan amount: $2000

Loan term: not specified

APR for 14-day $100 Loan: 30% for loans up to $2000

Maximum Finance Rate and Fees for every $100: ?

Finance Charge for 14-day $100 Loan: maximum $5 for a loan up to $75; $15 for $75-$250 loans; and $25 for loans above $250.

Michigan

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Payday loans are legal in Michigan but are subject to regulations under the Deferred Presentment Service Transactions Act (DPSTA). The DPSTA requires payday lenders to obtain a license from the Michigan Department of Insurance and Financial Services and regulates the terms and conditions of payday loans:

Status: Legal

Maximum loan amount: $600

Loan term: 31 days

APR for 14-day $100 Loan: 407%

Maximum Finance Rate and Fees for every $100: ?

Finance Charge for 14-day $100 Loan: $15.61

Minnesota

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Payday loans are legal in Minnesota, but state law places certain regulations on payday lenders to protect consumers. Some of the key regulations include the following:

    Status: Legal

    Maximum loan amount: $350

    Loan term: 30 days

    APR for 14-day $100 Loan: 391%

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: $15

    Mississippi

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    Payday loans are legal in Mississippi, but there are several regulations in place to protect consumers from predatory lending practices. The key regulations in Mississippi regarding payday loans include the following:

    Status: Legal

    Maximum loan amount: $500

    Loan term: 30 days (minimum 28 days if loan amount is between $250 and $500)

    APR for 14-day $100 Loan: 521%

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: $20

    Missouri

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    In Missouri, payday loans are regulated by the Missouri Division of Finance. The Missouri payday loan law regulates payday lenders in the state and provides protections for borrowers:

    Status: Legal

    Maximum loan amount: $500

    Loan term: 14-31 days

    APR for 14-day $100 Loan: 443%

    Maximum Finance Rate and Fees for every $100: maximum 75% of the initial loan amount (for the life of the loan plus all renewals)

    Finance Charge for 14-day $100 Loan: ?

    Montana

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    Payday loans are legal in Montana, but the state has enacted several regulations to protect consumers from predatory lending practices. Here are some of the key regulations:

    Status: Legal

    Maximum loan amount: $300

    Loan term: 31 days

    APR for 14-day $100 Loan: 36%

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: $1.38

    New Hampshire

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    In New Hampshire, payday loans are legal, but they are subject to certain regulations to protect consumers from predatory lending practices. Here are some key regulations that apply to payday loans in New Hampshire:

    Status: Legal

    Maximum loan amount: $500

    Loan term: 7-30 days

    APR for 14-day $100 Loan: 36%

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: $1.38

    Nebraska

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    Payday loans are legal in Nebraska and are regulated under the Nebraska Deferred Deposit Lending Act. This law sets limits on the maximum loan amount, interest rates, fees, and repayment terms that payday lenders can offer to borrowers in the state. Here are some of the key regulations for payday loans in Nebraska::

    Status: Legal

    Maximum loan amount: $500

    Loan term: maximum 34 days

    APR for 14-day $100 Loan: 391%

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: $15

    Nevada

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    Payday loans are legal in Nevada, but they are subject to several regulations to protect consumers from predatory lending practices. Some of the key regulations include the following:

    Status: Legal

    Maximum loan amount: 25% of gross monthly income

    Loan term: maximum 35 days

    APR for 14-day $100 Loan: not specified

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: not specified

    North Dakota

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    Payday loans are legal in North Dakota, but the state has implemented several regulations to protect borrowers from predatory lending practices. Here are some of the key regulations for payday loans in North Dakota:

    Status: Legal

    Maximum loan amount: $500

    Loan term: maximum 60 days

    APR for 14-day $100 Loan: 521%

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: $20

    Ohio

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    Payday loans are legal in Ohio, but the state heavily regulates them. The Ohio Short-Term Loan Act sets forth rules and regulations for payday lenders operating in the state. Here are some key regulations that payday lenders in Ohio must follow:

    Status: Legal

    Maximum loan amount: $1000

    Loan term: 91 days-1 year

    APR for 14-day $100 Loan: 28%

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: a monthly maintenance fee that’s the lesser of 10% of the loan’s principal or $30 is allowed; 2% loan origination charge is allowed for a loan of $500 and more (the loan origination charge interest is not allowed)

    Oklahoma

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    Payday loans are legal in Oklahoma and regulated by the Oklahoma Deferred Deposit Lending Act. Under this act, payday lenders are required to obtain a license from the Oklahoma Department of Consumer Credit and comply with certain regulations:

    Status: Legal

    Maximum loan amount: $500

    Loan term: maximum 12-45 days

    APR for 14-day $100 Loan: 207% (17% monthly)

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: $15 plus database fee

    Oregon

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    In Oregon, payday loans are regulated under state law to protect consumers from predatory lending practices. Here are some of the legal regulations that apply to payday loans in Oregon:

    Status: Legal

    Maximum loan amount: $50000

    Loan term: maximum 31-60 days

    APR for 14-day $100 Loan: 36%

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: ?

    Rhode Island

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    In Rhode Island, payday loans are legal and regulated under the state's Small Loan Act. Rhode Island state law also requires lenders to offer a repayment plan to borrowers who are unable to repay the loan on time. The repayment plan must allow the borrower to repay the loan in at least four equal installments over a period of at least three months.

    Status: Legal

    Maximum loan amount: $50000

    Loan term: minimum 13 days

    APR for 14-day $100 Loan: 261%

    Maximum Finance Rate and Fees for every $100: maximum 10% of the loan amount

    Finance Charge for 14-day $100 Loan: ?

    South Carolina

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    Payday lending is legal in South Carolina, but it is subject to a number of regulations intended to protect borrowers from predatory lending practices. Here are some of the key legal regulations that apply to payday loans in South Carolina:

    Status: Legal

    Maximum loan amount: $550

    Loan term: minimum 31 days

    APR for 14-day $100 Loan: not specified, up to 391%; no lender in South Carolina is now allowed to offer loans to the military in excess of 36% APR

    Maximum Finance Rate and Fees for every $100: maximum 15% of the loan amount

    Finance Charge for 14-day $100 Loan: ?

    South Dakota

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    Navigating the world of payday lending in South Dakota requires a clear understanding of the legislation and regulations that shape this industry. Payday loans offer quick financial relief, but in South Dakota, they are subject to specific laws aimed at protecting consumers from predatory lending practices:

    Status: Legal

    Maximum loan amount: $500

    Loan term: maximum 6 months

    APR for 14-day $100 Loan: 36%

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: $1.39

    Tennessee

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    Payday loans are legal in Tennessee, but the state has several regulations in place to protect borrowers from predatory lending practices. Here are some of the key regulations that apply to payday loans in Tennessee:

    Status: Legal

    Maximum loan amount: $500

    Loan term: maximum 31 days

    APR for 14-day $100 Loan: 460%

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: $17.65

    Texas

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    Payday loans are legal in Texas, but there are several regulations in place to protect borrowers. Here are some of the key regulations that apply to payday loans in Texas

    Status: Legal

    Maximum loan amount: not specified

    Loan term: 7-180 days

    APR for 14-day $100 Loan: can exceed 400%

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: >$30 => $1 for each $5

    [$30 – $100] => 1/10 of the loan amount + $3 /mo (<$35)

    [$35 – $70] => $3.50/mo + $4/mo (>$70)

    >$100 => $10 + $4/mo for each $100

    Utah

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    Payday loans are legal in Utah, but there are regulations in place to protect borrowers. Here are some of the key regulations that apply to payday loans in Utah:

    Status: Legal

    Maximum loan amount: not specified

    Loan term: maximum 70 days

    APR for 14-day $100 Loan: 658%

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: ?

    Virginia

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    Payday loans are legal in Virginia, but there are laws and regulations in place to protect borrowers from predatory lending practices. Here are some key regulations governing payday loans in Virginia:

    Status: Legal

    Maximum loan amount: $2500

    Loan term: 4-24 months

    APR for 14-day $100 Loan: 36%

    Maximum Finance Rate and Fees for every $100: ?

    Finance Charge for 14-day $100 Loan: The maintenance fee up to 8% or $25 (monthly); Total costs are not more than 50%; The late fee is $20; No verification fee

    Washington

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    Payday loans in Washington state are regulated by the Washington State Department of Financial Institutions (DFI) under the Washington Consumer Loan Act (CLA). Here are some of the key regulations regarding payday loans in Washington state:

    Status: Legal

    Maximum loan amount: $700 or 30% of gross monthly income, whichever is less

    Loan term: maximum 45 days

    APR for 14-day $100 Loan: 391%

    Maximum Finance Rate and Fees for every $100: <$500 = 15%;

    >$500 = 10%

    Finance Charge for 14-day $100 Loan: $15

    Wisconsin

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    Payday loans are legal in Wisconsin, but there are regulations in place to protect borrowers from predatory lending practices. Here are some of the legal regulations that apply to payday loans in Wisconsin:

    Status: Legal

    Maximum loan amount: Less of $1500 or 35% of income

    Loan term: maximum 90 days

    APR for 14-day $100 Loan: 74%

    Maximum Finance Rate and Fees for every $100: 2.75%/mo

    Finance Charge for 14-day $100 Loan: not specified

    Wyoming

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    In Wyoming, payday loans are legal and regulated by the Wyoming Division of Banking. The state sets no limit on the amount of a payday loan, but it does regulate the fees and charges that lenders can impose on borrowers. The state also sets limits on the number of times a borrower can renew or roll over a payday loan:

    Status: Legal

    Maximum loan amount: not specified

    Loan term: maximum 1 month

    APR for 14-day $100 Loan: 782%

    Maximum Finance Rate and Fees for every $100:

    Finance Charge for 14-day $100 Loan: $30 (or 20% per month)

    States prohibit payday loans

    Arizona, Arkansas, Connecticut, Georgia, Maryland, Massachusetts, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Vermont, West Virginia, and the District of Columbia.

    Payday loans are illegal in these states.