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Payday Lending in Vermont
Updated November 2026 · By Payday Loans Reviews Editorial Team · Not a lender
Payday loans are not allowed in Vermont. The state's rate cap stops them cold.
Under the Vermont Small Loan Law, lenders cannot charge more than about 18% APR. That ceiling is far below what a two-week payday loan typically costs elsewhere, so storefront and online payday lenders don't operate here legally. The VT Dept of Fin. Reg. enforces the rule.
Vermont short-term loan laws
- Max loan amount
- Prohibited
- Min loan term
- N/A
- Max loan term
- N/A
- Finance charge cap
- Capped at 18% APR
- Max absolute fee
- N/A
- Typical APR
- < 18%
- Rollovers (extensions)
- Prohibited
- Simultaneous loans
- N/A
- Right to rescind
- N/A
- Governing law
- Vermont Small Loan Law
- Regulator
- VT Dept of Fin. Reg.
Vermont at a glance
| Metric | Vermont | United States |
|---|---|---|
| Population | 645,254 | 332.3M |
| Median household income | $80,516 | $85,275 |
| Median rent | $1,218/mo | $1,432/mo |
| Income spent on rent | 33.3% | 31.6% |
| Homeownership | 73.3% | 65.4% |
| Poverty rate | 10.8% | 12.6% |
| Unemployment rate | 3.7% | 5.3% |
| Without health insurance | 3.9% | 8.6% |
| Veterans | 6.5% | 6.5% |
Source: U.S. Census Bureau, American Community Survey, by ZIP code. City and state figures are population-weighted averages of ZIP code data and are approximate.
Vermont in context
- Population rank
- 49th
- of 50 states
- Median household income rank
- 22nd
- of 50 states
- Households earning under $25,000
- 14.6%
- ▼ 0.3 pts vs US
- Median home value
- $310,278
- ▼ 20% vs US
- Home value to income
- 3.9×
- A $400 emergency expense
- 1.8 days
- of median household income
Borrowing $500 for 6 months in Vermont
| Option | Payment | Total cost of borrowing |
|---|---|---|
| Installment loan at the Vermont rate cap (18% APR) | $87.76/mo | $26.58 |
| Credit union PAL (28% APR) | $90.27/mo | $41.62 |
| Payday loan renewed every 2 weeks (typical $15 per $100, not available in Vermont) | $75.00 every 2 weeks | $975.00 |
- Monthly payment at the Vermont rate cap vs median monthly household income
- 1.3%
Example calculation with fixed monthly payments; the payday row shows typical out-of-state pricing for comparison. Actual rates and terms vary by lender.
Vermont alternatives to payday loans
Caught off guard by an unexpected bill? Securing quick cash in Vermont begins with grasping the ground rules. Since Vermont law outlaws payday loans with APRs above 100%, residents enjoy solid protection via tight consumer finance limits.
Our service links you to Vermont-licensed lenders supplying secure, regulation-following and lower-cost options with clear terms, payments spread over time and no exploitative charges.
Why borrowers in Vermont choose regulated loans
- Capped APRs Vermont sets maximum rates by law, making your payments more affordable.
- Licensed lenders The VT Dept of Fin. Reg. keeps watch on lenders and servicers licensed or authorized to operate in Vermont.
- Fixed installment terms You pay back the loan in steady monthly amounts rather than a single massive lump sum.
- Transparent financing You are shown all fees clearly at the start, following Vermont regulatory standards.
Consumer notice for Vermont residents: Conventional short-term payday loans with triple-digit APRs are not allowed under Vermont law (Vermont Small Loan Law). This website does not promote or broker unlicensed, high-interest cash advances. Every loan shown must adhere to Vermont rate caps and consumer finance requirements. Study all terms before committing.
What borrowing actually costs in Vermont
Because a traditional $500 payday loan is blocked by the rate cap, you won't find one here. Let's walk through what that means in practice. If you could get a payday loan, which you can't, a typical two-week $500 advance elsewhere might carry fees totaling more than the original loan amount, with the full balance due on your next payday. In Vermont, that structure is illegal. Any lender offering it is breaking state law. What you can legally borrow is a small loan under 18% APR. For $500 over six months at 18%, you'd pay about $27 in total interest, with monthly payments around $88.
Credit union Payday Alternative Loans are another path. NCUA rules allow PALs from $200 to $2,000, with terms of 1 to 12 months and APR capped at 28%, plus an application fee up to $20. A $500 PAL over six months at 28% APR costs about $40 in interest, with payments near $90 monthly. You'll need proof of income and membership at the credit union. If you're active-duty military or a dependent, the Military Lending Act caps your MAPR at 36% on most small loans, including fees.
Under the Truth in Lending Act, any legal lender must show you the APR and the total finance charge before you sign. Read that disclosure carefully. Today, check if you belong to a Vermont credit union that offers PALs, or ask your employer about paycheck advance programs that don't charge interest.
$500 payday loan vs alternatives in Vermont
| Option | Term | Cost | Details |
|---|---|---|---|
| Payday loan | — | Not allowed | Vermont rate cap |
| Credit card cash advance | 30 days | $37.33 (typical) | 5% fee + 30% APR |
| Credit union PAL | 6 months | $62 total | $90.27/mo at 28% APR, $20 fee |
| Installment loan at state max | 6 months | $36 total | $89.26/mo at 24% APR |
Calculated from state rules in our database; card terms are typical, not a quote.
Loan cost calculator for Vermont
Payday loans are not available in Vermont. See what a regulated installment loan or credit union PAL would cost instead.
Vermont cap for consumer loans: 18.0%
- Monthly payment
- $87.76
- Total interest
- $26.58
- Total to repay
- $526.58
- Share of median monthly household income in Vermont
- 1.3%
- Same loan as a payday loan
- A payday loan at a typical $15 per $100, renewed every two weeks for the same period, would cost $975
Estimate only, with fixed monthly payments. Actual rates and terms vary by lender.
Vermont payday loan answers
Is payday lending permitted here?
Standard payday loans are not permitted. The Vermont Small Loan Law caps consumer loans at capped at 18% APR, blocking the triple-digit APRs and debt traps associated with traditional payday lending.
Is it allowed to borrow from an online lender outside the state?
Not legally. Any lender—online or from another state—must obey consumer lending laws when lending here, and a loan that breaks the rate cap or is issued without a VT Dept of Fin. Reg. license may be invalid under state law.
Why did this state decide to limit payday lending?
Vermont lawmakers imposed strict limits to keep residents out of debt traps, and consumer loans here are capped at capped at 18% APR, compared with the 300% to 600% APR typical of payday loans.
What do I do if a lender without a license contacts me?
State law forbids lending without a valid license in Vermont, so contact the VT Dept of Fin. Reg. to file a complaint if an unlicensed lender approaches you or tries to collect on an unauthorized high-interest debt.
Which borrowing choices are legal for Vermont residents?
Payday loans with steep interest are prohibited here, though these regulated substitutes exist:
- Small loans from federal credit unions (PALs): capped at 28% APR.
- Installment loans from credit unions: regulated products that comply with state rate limits.
- EWA apps: access wages you have already earned, with flat fees or no interest.
- Local aid programs: community groups and nonprofit emergency funds.