Payday loans are small, short-term loans that should be provided in accordance with state regulations. In the US, states can be classified into three categories depending on the laws that apply to payday loans: restrictive, hybrid, and permissive.
In restrictive states, payday lending is either not allowed or it is restricted by low price caps (usually the 36% APR). Restrictive states are those where payday loans are not authorized, not exempted from state laws on usury, or are prohibited by law. In total, 14 US states fall under this category, as well as the District of Columbia which prohibited payday lending in 2007.
In hybrid states, payday loans are regulated in at least one of the following ways:
- With rate caps that are usually lower than in permissive states (normally around 10%);
- With limitations in respect to the number of loans per individual (e.g. 8 loans per year);
- With several pay periods to repay the loan.
Eight US states can be classified as hybrid.
In permissive states (28), payday regulations are least severe and allow for higher fees and APRs.
What follows is a detailed analysis of regulations in all US states, the District of Columbia, and other US territories.
US States
Alabama
- Maximum Loan Amount: $500
- Maximum Loan Term: Not less than 10 days and not more than 31 days
- Finance Charges: Not greater than 17.5% of the amount advanced.
Alaska
- Maximum Loan Amount: $500
- Maximum Loan Term: Not more than 14 days
- Finance Charges: A nonrefundable loan origination fee not greater than $5 and a fee amounting to up to $15 per $100 loaned or 15% of the total loan amount, whichever is less.
Arkansas
- Prohibited
Arizona
- Prohibited
California
- Maximum Loan Amount: $300
- Maximum Loan Term: Not more than 31 days
- Finance Charges: Payday loan fee not greater than 15% of the face amount of the check.
Colorado
- Maximum Loan Amount: Not more than $500
- Maximum Loan Term: No maximum loan term; minimum loan term 6 months
- Finance Charges: Payday loan fee may not be greater than 20% for loans up to $300, plus $7.50 of any amount loaned for loans that exceed $300. The lender may also charge an interest rate of 45% per year. If the payday loan is repaid before the due date, the lender must refund a prorated portion of the APR. Monthly maintenance fee may not be greater than $7.50 per $100 loaned or up to $30 per month.
Connecticut
- Prohibited
Delaware
- Maximum Loan Amount: $1000, maximum 5 loans a year per individual
- Maximum Loan Term: Not more than 60 days
- Finance Charges: Unknown
Florida
- Maximum Loan Amount: $500 exclusive of fees
- Maximum Loan Term: Not less than 7 days and no longer than 31 days
- Finance Charges: Payday loan fee may not exceed 10%. Verification fee may be charged.
Georgia
- Prohibited
Hawaii
- Maximum Loan Amount: $600
- Maximum Loan Term: No longer than 32 days
- Finance Charges: Payday loan fee may not exceed 15% of the face amount of the check.
Idaho
- Maximum Loan Amount: $1000
- Maximum Loan Term: No regulation
- Finance Charges: No regulation
Illinois
- Maximum Loan Amount: the lesser of $1000 or 25% of the borrower’s gross monthly income
- Maximum Loan Term: At least 13 days, no longer than 120 days.
- Finance Charges: Payday loan fee may not exceed $15.5 per $100 loaned.
Indiana
- Maximum Loan Amount: Not less than $50 and not more than $550
- Maximum Loan Term: No upper limit. Minimum loan term is 14 days.
- Finance Charges: No more than 15% of the principal for the first $250. For loans between $250 and $400, the charges may not exceed 13% of the amount. For loans between $400 and $500, the charges may not be greater than 10% of the amount.
Iowa
- Maximum Loan Amount: No more than $500 for any number of loans at any time
- Maximum Loan Term: Not more than 31 days
- Finance Charges: Payday loan fee may not exceed $15 on the first $100 or more than $10 for any extra $100.
Kansas
- Maximum Loan Amount: $500
- Maximum Loan Term: Not less than 7 days and not more than 30 days
- Finance Charges: Payday loan fee may not be greater than 15% of the principal. Contract rate may not exceed 3% per month past the due date. Returned check fees are permitted.
Kentucky
- Maximum Loan Amount: Not more than two loans at a time with the total amount not exceeding $500
- Maximum Loan Term: No longer than 60 days.
- Finance Charges: Payday loan fee should not be greater than $15 per $100 loaned.
Louisiana
- Maximum Loan Amount: $350
- Maximum Loan Term: No longer than 30 days
- Finance Charges: Payday loan fee should not exceed 16.75% of the principal.
Maine
- Maximum Loan Amount: No regulation
- Maximum Loan Term: No regulation
- Finance Charges: Payday loan fee should not be greater than $5 for loans up to $75, $15 for loans between $76 and $249, and $25 for loans that exceed $250.
Maryland
- Prohibited
Massachusetts
- Prohibited
Michigan
- Maximum Loan Amount: $600
- Maximum Loan Term: No longer than 31 days
- Finance Charges: Payday loan fee may not exceed 15% of the first $100, 14% of the second $100, 13% of the third $100, 12% of the fourth $100, 11% of the fifth $100, and 11% of the sixth $100 loaned. Database verification fee is permitted.
Minnesota
- Maximum Loan Amount: $350
- Maximum Loan Term: No longer than 30 days
- Finance Charges: Payday loan fee may not exceed $5.50 for loans up to $50, 10% plus a $5 administrative fee for loans between $51 and $100, 7% (minimum $10) plus a $5 administrative fee for loans between $101 and $250, 6% (minimum $17.50) plus a $5 administrative fee for loans between $251 and $350. After the due date, the contract rate may not be greater than 2.75% of the remaining amount per month.
Mississippi
- Maximum Loan Amount: $500 including the fees
- Maximum Loan Term: 30 days for loans under $250; at least 28 but not more than 30 days for loans between $250 and $500
- Finance Charges: Payday loan fee may not exceed $20 per $100 loaned for loans under $250 and $21.95 per $100 loaned for loans between $250 and $500. Check-cashing fee may not exceed the greater of 3% of the amount loaned or $5 for checks issued by the government, any county or municipality or any government agency, the greater of 10% of the amount or $5 for personal checks and the greater of 5% or $5 for other checks or money orders.
Missouri
- Maximum Loan Amount: $500
- Maximum Loan Term: Not less than 14 days and not more than 31 days
- Finance Charges: Total amount of interest and fees may not exceed 75% of the amount loaned.
Montana
- Maximum Loan Amount: $300, minimum $50
- Maximum Loan Term: Not more than 31 days
- Finance Charges: Maximum APR 36%
Nebraska
- Maximum Loan Amount: $500
- Maximum Loan Term: Not more than 34 days
- Finance Charges: Payday loan fee may not be greater than $15 per $100 loaned or pro rata for any part thereof on the face amount of the check.
Nevada
- Maximum Loan Amount: 25% of gross monthly income
- Maximum Loan Term: Not more than 35 days, except in the case of installment payday loans, where the term may be up to 90 days, with no possibility of extension.
- Finance Charges: No regulation
New Hampshire
- Maximum Loan Amount: $500
- Maximum Loan Term: Not less than 7 days and not more than 30 days
- Finance Charges: Maximum APR 36%
New Jersey
- Prohibited
New Mexico
- Maximum Loan Amount: Total amount loaned plus the fees may not exceed 25% of the borrower’s gross monthly income.
- Maximum Loan Term: Not less than 14 days, not more than 35 days
- Finance Charges: Administrative fee not greater than $15.50 per $100
New York
- Prohibited
North Carolina
- Prohibited
North Dakota
- Maximum Loan Amount: $500, with no more than $600 outstanding in total
- Maximum Loan Term: Not more than 60 days
- Finance Charges: Payday loan fee may not exceed 20% of the amount loaned.
Ohio
- Maximum Loan Amount: $500
- Maximum Loan Term: Maximum not specified. Minimum 31 days
- Finance Charges: APR not greater than 28%
Oklahoma
- Maximum Loan Amount: $500, not including the finance charge
- Maximum Loan Term: Not less than 12 days and not more than 45 days
- Finance Charges: For loans up to $300, the fee should not exceed $15 per $100 loaned. For loans between $301 and $500, an additional fee may be charged, amounting to $10 per every extra $100 loaned.
Oregon
- Maximum Loan Amount: $50,000
- Maximum Loan Term: Not less than 31 days and not more than 60 days
- Finance Charges: APR may not exceed 36%. A one-time origination fee is allowed, no greater than $10 per $100 loaned or $30, whichever is less.
Pennsylvania
- Prohibited
Rhode Island
- Maximum Loan Amount: $500
- Maximum Loan Term: No maximum; minimum term 13 days
- Finance Charges: Payday loan fee may not be greater than 10% of the amount loaned. Check cashing fee may not exceed the greater of 3% of the amount loaned or $5 for checks that constitute payments of state public assistance or federal social security benefit, the greater of 10% of the amount or $5 for personal checks and the greater of 5% or $5 for all other checks.
South Carolina
- Maximum Loan Amount: $550, not including the fees
- Maximum Loan Term: No longer than 31 days
- Finance Charges: Payday loan fee may not exceed 15% of the amount loaned.
South Dakota
- Maximum Loan Amount: $500
- Maximum Loan Term: No regulation
- Finance Charges: No regulation
Tennessee
- Maximum Loan Amount: $500
- Maximum Loan Term: Not more than 31 days
- Finance Charges: Payday loan fee may not exceed 15% of the principal. An additional fee related to operational costs may be charged.
Texas
- Maximum Loan Amount: Not specified
- Maximum Loan Term: Not less than 7 days and not more than 31 days
- Finance Charges: The lender may not charge more than $1 per $5 loaned for loans up to $30 and for loans between $30 and $100, a fee not greater than 10% may be charged. In the case of installment payday loans, charges may not exceed $3 for loans up to $35, $3.50 for loans between $35 and $70 and $4 for loans greater than $70. For loans greater than $100, acquisition charge may not exceed $10 and installment account handling charge may not exceed $4 per $100 loaned. APRs may range from 83.43% for $350 loans in the duration of 30 days to 569.92% for $100 loans in the duration of 7 days.
Utah
- Maximum Loan Amount: No regulation
- Maximum Loan Term: No longer than 10 weeks
- Finance Charges: Not specified
Vermont
- Prohibited
Virginia
- Maximum Loan Amount: $500
- Maximum Loan Term: No maximum; minimum of two pay periods
- Finance Charges: Payday loan fee may not exceed 20% of the amount loaned. APR may not exceed 36%. A $5 verification fee may be charged.
Washington
- Maximum Loan Amount: The lesser of $700 or 30% of gross monthly income
- Maximum Loan Term: Up to 45 days
- Finance Charges: Payday loan fee may not exceed 15% of the first $500 and 10% of the remaining portion of loans greater than $500 and smaller than the maximum $700.
West Virginia
- Prohibited
Wisconsin
- Maximum Loan Amount: The lesser of $1,500 or 35% of the borrower’s gross monthly income
- Maximum Loan Term: Up to 90 days
- Finance Charges: No limit on the fees charged prior to the due date. If the loan is not repaid by or on the due date, the lender may charge interest no greater than 2.75% of the principal per month.
Wyoming
- Maximum Loan Amount: No limit
- Maximum Loan Term: No longer than one calendar month
- Finance Charges: Payday loan fee may not exceed the greater of 20% of the principal per month or $30.
District of Columbia
- Prohibited
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Statutory citation not available for US territories, including American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the US Virgin Islands.