Minnesota state map
A Guide to Payday and Title Loans in

Minneapolis, MN

Payday Lending in Minneapolis

Minneapolis is known as “The Land of 10,000 Lakes” due to the many wetlands, nearby lakes, and the Mississippi River, which runs through the middle of the city. Even the name Minneapolis is derived from the Dakota Sioux word for water (mni), along with the Greek word for city (polis). The City of Lakes is famous for the Mall of America and the Minnesota Vikings. This major global city also features Fortune 500 companies and is home to a number of cultural landmarks. Minneapolis is part of the “Twin Cities” with neighboring capital St. Paul.

Minneapolis boasts an estimated population of 422,331, making it the 46th largest city in the United States. The greater metro area is home to an estimated 3,551,036 people, the 16th largest in the U.S. Unfortunately, the poverty rate in Minneapolis is nearly double that of the rest of the state of Minnesota. Nearly 22% of Minneapolis residents are living in poverty, compared to just about 11% across the state. That means an estimated 89,956 Minneapolis residents live below the federal poverty line, putting them at great risk of falling prey to predatory lending schemes.

Poverty Rate in Minneapolis vs. Minnesota
Minneapolis
Minnesota
21.3%
10.8%
Poverty Rate

Payday Loans in Minneapolis

Unfortunately, predatory lending is alive and well in the Twin Cities. In essence, predatory lending happens when lenders take advantage of customers who are financially desperate by charging interest that is excessive, giving repeat loans to one borrower, or using overly aggressive collection practices, among other disreputable business practices.

To report predatory lending or bad practices in Minnesota, file a complaint with the state’s commerce department. In the online complaints section, choose the industry from the drop-down menu. There are four options: consumer small loans, industrial loan and thrift, payday lenders, and regulated lenders.

Not sure which to choose? Call the department at 651-539-1600. The consumer protection email is: consumer.protection@state.mn.us.

What is a Payday Loan?

A payday loan is a small dollar loan that uses the borrower’s future paycheck as collateral. Payday loans are advertised as quick-fix loans to cover emergency expenses, but the high interest and fees can make it difficult to overcome debt from payday loans. Low-income households are in greater danger of falling into a never ending cycle of debt caused by these short-term, high risk loans.

Why Should you Avoid Payday Lenders in Minneapolis?

The laws surrounding payday loans in Minnesota are more complicated than in many other states. The term “payday loan” isn’t used in Minnesota law. Instead, the law describes two types of loans: consumer small loans and consumer short-term loans. Minnesota Statutes Section 47.60 governs consumer small loans up to $350. Then, Minnesota Statutes Section 47.601 covers consumer short-term loans, which go up to $1,000. Consumer short-term loans are not subject to the same interest regulations as consumer small loans.

Minnesota law states that fees on short-term loans can’t top 10%, following a sliding scale up to $350. For loans of $50 or less, the fee is $5.50. Between $50.01 and $100, the fee is 10%, plus a $5 fee. Between $100.01 and $250, the fee is 7% with a minimum of $10 plus a $5 fee. Between $250.01 and $350, the fee is 6% with a minimum of  $17.50 plus a $5 fee.

The rules differ for consumer short-term loans. For loans from $350.01 to $1,000, interest is capped at 33% APR, plus a $25 fee.

Unlike other states, lenders don’t need a physical location to issue loans to Minnesota residents, but they do need to be licensed. You can look up if a lender is licensed here.

If you would like to know more detailed information about the laws surrounding payday loans and the history of payday loans in Minnesota, please read this helpful page.

While these laws offer some protection for borrowers, the average annual interest rate for a payday loan in Minnesota is still 252%. This can make it difficult for borrowers to pay back their loans on time and get out of debt. Borrowers looking for a no credit check loan in Minneapolis should explore other options before taking out a payday loan.

2016 Credit and Debt Statistics for Minneapolis/St. Paul vs. Minnesota vs. U.S.

 

Ave. Number of Credit Cards:

Ave. Balances on Credit Cards:

Ave. Number of Retail Cards:

 

Ave. Non-Mortgage Debt:

Ave. Mortgage Debt:

Ave. Retail Debt:

90 Plus Days Past Due Delinquency:

 

Minneapolis/St. Paul

1.90

$3,156

1.08

 

$29,140

$137,220

$357

6%

Minnesota

1.87

$3,025

1.06

 

$28,456

$132,024

$350

6%

United States

2.35

$5,551

1.51

 

$39,216

$196,014

$1,081

32%

Local Resources to Help Minneapolis Residents Avoid Predatory Lenders

Sadly, short-term loans are not going away anytime soon. People have unexpected emergencies all the time and need cash quick to cover food, rent, and emergency expenses like medical bills. When you are in a lurch like this, taking out a loan for a small fee may seem like a quick fix, but the mounting interest can lead to ongoing debt. Fortunately, there are other options available for families in need of assistance.

Consumer Spending in Minneapolis vs. Minnesota vs. U.S.

 

Total per Household

Apparel & Services

Dining Out

Food Consumed at Home

Entertainment/Recreation

Health Care

Housing

Life and Other Insurance

Pensions and Social Security

Transportation

Minneapolis

$67,762

$2,184

$3,396

$5,000

$2,975

$4,951

$21,633

$350

$6,988

$7,878

Minnesota

$72,267

$2,178

$3,374

$5,461

$3,192

$5,860

$22,111

$455

$7,415

$8,899

United States

$57,311

$1,803

$3,154

$4,049

$2,913

$4,612

$18,886

$322

$6,509

$9,049

Food Assistance Resources in Minneapolis

The Minnesota Department of Human Services administers the Supplemental Nutrition Assistance Program (SNAP), a meal assistance program for families in need. More information and the application can be found here. There are also a number of food banks and nonprofit organizations that can help:

Hunger Solutions

  • Address: 555 Park St., Suite 400; St. Paul, MN 55103
  • Phone: 651-486-9860

Groveland Food Shelf

  • Address: 1900 Nicollet Ave; Minneapolis, MN 55403
  • Phone: 612-871-0277

Joyce Uptown Food Shelf

  • Address: 3041 Fremont Ave S; Minneapolis, MN 55408

Merrick Community Services

  • Multiple locations

Friends in Need Food Shelf

  • Address: 535 4th Street; St. Paul Park, MN  55071
  • Phone: 651-458-0730

Neighborhood House

  • Multiple locations
Medical Debt in Hennepin County vs. Minnesota
Hennepin County
Minnesota
5.0%
5.0%
% Uninsured
3.0%
3.0%
% with Medical Debt in Collections
$348
$342
Median medical debt in collections

Healthcare Resources in Minneapolis

Healthcare emergencies can be costly, especially for those who are uninsured. If you are in need of health insurance, check to see if you are eligible for Medical Assistance (MA), which is Minnesota’s branch of Medicaid. You can also visit one of these free or sliding scale clinics:

Community-University Health Care Center

  • Address: 2001 Bloomington Avenue S; Minneapolis, MN 55404
  • Phone: 612-301-3433

Southside Community Health Services

  • Address: 324 E 35th St; Minneapolis, MN 55408
  • Phone: 877-938-9341

Neighborhood Healthsource

  • Address: 2301 Central Ave NE; Minneapolis, MN 55418
  • Phone: 612-588-6439

Rent Assistance in Minneapolis

If you are short on rent or facing eviction, there are resources that can help. If you need rent assistance, start with Minnesota Housing, which can provide help in emergency situations for rent, repairs, and utility bills (see here for Hennepin County and Ramsey County). The following nonprofit organizations also provide rent assistance to families in need:

Salvation Army Harbor Light Center

  • Multiple locations

Interfaith Outreach

  • Phone: 763-489-7500

Community Action Partnership of Hennepin County

  • Multiple locations
Monthly Housing Costs as a Percentage of Household Income in Minneapolis
  • Less than $20,000:19.1%
  • $20,000 to $34,999:14.3%
  • $35,000 to $49,999:12.2%
  • $50,000 to $74,999:16.0%
  • $75,000 or more:36.2%
Minneapolis vs. Minnesota Median Housing Values and Monthly Costs

 

Median Housing Value

% of Housing Units with a Mortgage

Median Monthly Cost (w/ mortgage)

Median Monthly Cost (w/o mortgage)

Median Rent

Minneapolis

$212,800

74.0%

$1,600

$586

$898

Minnesota

$191,500

67.4%

$1,487

$485

$873

Works Cited