Where are Payday Loans Still Legal?

Inside Subprime: Nov 12, 2018

By Ben Moore

There are twenty states, as well as the District of Columbia, that currently prohibit extremely high cost payday loans. Thirteen states completely prohibit payday loans, with some of the states setting an APR cap for small loan lenders in the state.

Prohibited states:

  • Arkansas prohibits payday loans. Small loans are limited to a 17 percent APR cap as of 2010.
  • Georgia prohibits payday loans under racketeering laws.
  • New York prohibits payday loans through criminal usury statutes. Small loans are limited to 25 to 30 percent APR.
  • New Jersey prohibits payday loans through criminal usury statutes.  Small loans are limited to 25 to 30 percent APR.
  • Arizona prohibits payday loans as of 2010. There is a 36 percent cap on small loans for lenders operating in the state.
  • North Carolina prohibits payday loans.
  • Connecticut prohibits payday loans.
  • Maryland prohibits payday loans.
  • Massachusetts prohibits payday loans.
  • Pennsylvania prohibits payday loans.
  • Vermont prohibits payday loans.
  • West Virginia prohibits payday loans.
  • The District of Columbia repealed its payday laws and now prohibits payday loans.

There are three states that permit lower-cost payday loans.

Lower-Cost Payday Loans States:

There are currently thirty one states that permit high-cost payday loans, with current legislation that authorizes payday loans, or loopholes that are exploited by the payday loan industry in the state.

High-Cost Payday Loan States:

  • Alabama permits payday loans, allowing a maximum loan amount of $500 with a max APR on a $100 loan at 456.25 percent. The state allows finance charges of up to 17.5 percent on top of the APR, as well as a 3 percent per month fee if the loan enters default status.
  • Alaska permits payday loans, allowing a maximum loan amount of $500, with a max APR on a $100 loan at 520 percent. The state allows finance charges of $5 plus the lesser of $15 per $100 loan, or 15 percent.
  • California permits payday loans, allowing a maximum loan amount of $255, with a max APR on a $100 loan at 459 percent. The state allows a finance charge of 15 percent.
  • Delaware permits payday loans, allowing a maximum loan amount of $1,000, with no limit on annual percentage rates. The state does not have specified maximum finance rates or fees.
  • Florida permits payday loans, allowing a maximum loan amount of $500, with a max APR on a $100 loan at 419 percent. The state allows finance charges of 10 percent plus a verification fee that cannot exceed $5.
  • Hawaii permits payday loans, allowing a maximum loan amount of $600, with a max APR on a $100 loan at 459 percent. The state allows a finance charge of 15 percent, and a $17.65 charge for a 14-day $100 loan.
  • Idaho permits payday loans, allowing a maximum loan amount of $1,000. However, the loan cannot exceed 25 percent of the gross monthly income of the borrower. A $100 payday loan has no APR limit. The state does not have specified maximum finance rates or fees.
  • Illinois permits payday loans, allowing a maximum loan amount of $1,000 (or 25 percent of the borrower’s gross monthly income). A $100 loan can have a max APR of 403 percent. The state allows finance charges of $15.50 per $100 borrowed, plus a $1 verification fee.
  • Indiana permits payday loans, allowing a maximum loan amount of $550. However, the loan cannot exceed 20 percent of the borrower’s monthly gross income. A $100 loan can have a max APR of 390 percent. The state allows finance charges which can range from 10 to 15 percent depending on the size of the loan.
  • Iowa permits payday loans, allowing a maximum loan amount of $500 with a max APR on a $100 loan at 433 percent. The state allows finance charges which vary depending on the size of the loan.
  • Kansas permits payday loans, allowing a maximum loan amount of $500 with a max APR on a $100 loan at 390 percent. The state allows finance charges up to 15 percent of the loan.
  • Kentucky permits payday loans, allowing a maximum loan amount of $500 with a max APR on a $100 loan at 459 percent. The state allows finance charges of $15 for every $100 borrowed, plus a $1 database fee.
  • Louisiana permits payday loans, allowing a maximum loan amount of $350 with a max APR on a $100 loan at 780 percent. The state allows finance charges of 16.75 to 36 percent depending on the size of the loan.
  • Michigan permits payday loans, allowing a maximum loan amount of $600 with a max APR on a $100 loan at 390 percent. The state allows finance charges of 11 to 15 percent depending on the size of the loan.
  • Minnesota permits payday loans, allowing a maximum loan amount of $350 with a max APR on a $100 loan at 390 percent. The state allows finance charges that vary depending on the size of the loan.
  • Mississippi permits payday loans, allowing a maximum loan amount of $500 with a max APR on a $100 loan at 520 percent. The state allows finance charges up to $21.95 per $100 borrowed.
  • Missouri permits payday loans, allowing a maximum loan amount of $500 with a max APR on a $100 loan at 1,950 percent. The state does not have specified maximum finance rates or fees, but no borrower can be required to pay a total amount of accumulated interest and fees in excess of 75 percent of the initial loan.
  • Nebraska permits payday loans, allowing a maximum loan amount of $500 with a max APR on a $100 loan at 459 percent. The state allows finance charges of $15 per $100 borrowed.
  • Nevada permits payday loans, allowing a maximum loan amount of 25 percent of the borrower’s expected monthly gross income, with no APR limit set. The state does not have specified maximum finance rates or fees. If the loan enters default status, the interest rate must be equal to or less than the prime rate at the largest bank in the state plus 10 percent.
  • New Mexico permits payday loans, allowing a maximum loan amount of $2,500 with a max APR on a $100 loan at 416 percent. The state allows finance charges of $15.50 per $100 borrowed, plus a $.50 verification fee per $100.
  • North Dakota permits payday loans, allowing a maximum loan amount of $500 with a max APR on a $100 loan at 520 percent. The state allows finance charges of 20 percent plus a databasing fee.
  • Oklahoma permits payday loans, allowing a maximum loan amount of $500 with a max APR on a $100 loan at 390 percent. The state allows finance charges of $10 to $15 per $100 borrowed depending on the size of the loan.
  • Rhode Island permits payday loans, allowing a maximum loan amount of $500 with a max APR on a $100 loan at 260 percent. The state also allows finance charges of 10 percent.
  • South Carolina permits payday loans, allowing a maximum loan amount of $550 with a max APR on a $100 loan at 390 percent. The state allows finance charges of up to 15 percent of the principal loan balance.
  • Tennessee permits payday loans, allowing a maximum loan amount of $425 with a max APR on a $100 loan at 459 percent. The state allows finance charges of up to 15 percent of the face value of the loan check.
  • Texas permits payday loans. The state does not have a specified maximum loan amount, and no cap on APRs. Lenders are limited to a finance rate of 10 percent.
  • Utah permits payday loans. The state does not have a specified maximum loan amount, and lacks a cap on APRs. There is no limit on maximum finance rates and fees.
  • Virginia permits payday loans, allowing a maximum loan amount of $500 with a max APR on a $100 loan at 687.76 percent. The state allows finance charges of 36 percent annual interest plus a $5 verification fee plus 20 percent of the loan.
  • Washington permits payday loans, allowing a maximum loan amount of $700 or 30 percent of the borrower’s gross monthly income, whichever is less. The state has a max APR cap for a $100 loan at 390 percent. The state allows finance charges of 10 to 15 percent depending on the size of the loan. Borrowers are limited to 8 payday loans per year.
  • Wisconsin permits payday loans, allowing a maximum loan amount of $1,500 or 35 percent of the borrower’s gross monthly income. The state has no max APR limit, and no specified limit on finance rates and fees.
  • Wyoming permits payday loans. The state does not have a maximum loan amount limit. $100 loans have a set maximum APR of 780 percent, with finance rates at 20 percent per month.

For more information about payday loans, title loans and scams, check out our State Financial Resource Guides.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIn