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Small-Dollar Loan Rules by State
State governments license and oversee most small-dollar non-bank lending in the United States, and the 50 states set widely different legal boundaries. One state may permit short-term deferred presentment loans at triple-digit annual percentage rates; a neighboring state may apply a strict usury cap that prohibits high-cost payday lending altogether. This section collects every rule affecting small loans in each state onto a single reference page, along with the agency responsible for enforcement.
Select any state from the table below to read its payday loan regulations, APR limits on fixed-payment installment loans, and licensing requirements. Each state page distills the main statutes to one screen and provides direct links to our thorough guides on payday loans, cash advances, installment loans, and tribal loans, as well as local listings of loan companies, banks, credit unions, and pawn shops. Payday Loans Reviews is an independent, free educational resource, not a lender or loan broker, and this overview is not legal advice.
How to use this comparison
- Payday loan status and limits. The payday columns indicate whether a state licenses deferred presentment lenders, the statutory maximum loan amount, and the typical APR or rate ceiling set by law. Across the country, a standard payday loan runs about $15 per $100 borrowed for a two-week term, which works out to approximately 391% APR.
- Installment loan all-in APR column. Under distinct state small-loan statutes, installment loans are returned in fixed monthly payments across several months or years. The table reports the peak all-in APR on a $2,000, 24-month loan, factoring in interest and compulsory fees such as an origination fee.
- What Prohibited status means. Where a state appears as Prohibited, a usury cap on interest and fees prevents lenders from charging triple-digit payday loan rates. Borrowers in those states may still obtain licensed installment loans that respect the rate ceiling or get funds through a credit union.
- What sets apart bank, credit union, and online lending rules. Non-bank lenders making loans to a state's residents generally must hold that state's license and obey its cost caps, even when operating online. Chartered banks and federal credit unions follow federal banking and NCUA rules, such as the 28% APR limit on federal credit union Payday Alternative Loans (PALs).
- How to make sure a lender is licensed. You can verify whether a lender is licensed by contacting your state regulator—the one shown in the last column—before signing any loan agreement. Another option is to look up the company through NMLS Consumer Access at nmlsconsumeraccess.org, keeping in mind that not every state uses this system for every license category.
50 states compared
Compare payday lending legal status, top loan sizes, typical payday APRs or rate ceilings, installment loan limits, and enforcement agencies across all 50 states in the reference table below. Selecting a state name opens its full one-page legal summary.
| State | Payday status | Typical APR or rate cap | State regulator | Max APR ($2,000 installment) |
|---|---|---|---|---|
| Arizona | Prohibited | Cap 36% APR | AZ Dept of Ins. & Fin. Inst. | 41% |
| Arkansas | Prohibited | Cap 17% APR | AR State Bank Dept | 17% |
| Colorado | Prohibited | Cap 36% APR | CO Div. of Banking | 31% |
| Connecticut | Prohibited | Cap 12% APR | CT Dept of Banking | 36% |
| Georgia | Prohibited | Cap 16% APR | GA Dept of Banking & Fin. | 32% |
| Hawaii | Prohibited | Cap 36% APR | HI Div. of Fin. Inst. | 32% |
| Illinois | Prohibited | Cap 36% APR | IL IDFPR | 36% |
| Maine | Prohibited | Cap 30% APR | ME Bureau of Cons. Credit | 30% |
| Maryland | Prohibited | Cap 33% APR | MD Office of Fin. Reg. | 30% |
| Massachusetts | Prohibited | Cap 23% APR | MA Div. of Banks | 25% |
| Minnesota | Prohibited | Cap 36% APR | MN Dept of Commerce | 33% |
| Montana | Prohibited | Cap 36% APR | MT Div. of Banking | 36% |
| Nebraska | Prohibited | Cap 36% APR | NE Dept of Banking | 30% |
| New Hampshire | Prohibited | Cap 36% APR | NH State Banking Dept | 36% |
| New Jersey | Prohibited | Cap 30% APR | NJ Dept of Banking | 30% |
| New Mexico | Prohibited | Cap 36% APR | NM Fin. Inst. Div. | 36% |
| New York | Prohibited | Cap 25% APR | NY DFS | 25% |
| North Carolina | Prohibited | Cap 15% APR | NC Comm. of Banks | 35% |
| Pennsylvania | Prohibited | Cap 24% APR | PA Dept of Banking | 24% |
| South Dakota | Prohibited | Cap 36% APR | SD Div. of Banking | 36% |
| Vermont | Prohibited | Cap 18% APR | VT Dept of Fin. Reg. | 21% |
| Virginia | Prohibited | Cap 36% APR | VA SCC | 50% |
| West Virginia | Prohibited | Cap 31% APR | WV Div. of Fin. Inst. | 33% |
| Alabama | Allowed | ~456% | AL State Banking Dept | No cap |
| Alaska | Allowed | ~435% | AK Div. of Banking | 31% |
| California | Allowed | ~460% | CA DFPI | 31% |
| Delaware | Allowed | ~521%+ | DE State Bank Commissioner | No cap |
| Florida | Allowed | ~304% | FL Office of Financial Reg. | 37% |
| Idaho | Allowed | ~652%+ | ID Dept of Finance | No cap |
| Indiana | Allowed | ~382% | IN Dept of Fin. Inst. | 40% |
| Iowa | Allowed | ~337% | IA Div. of Banking | 36% |
| Kansas | Allowed | ~391% | KS State Bank Commissioner | 38% |
| Kentucky | Allowed | ~391% | KY Dept of Fin. Inst. | 40% |
| Louisiana | Allowed | ~780% | LA Office of Fin. Inst. | 38% |
| Michigan | Allowed | ~369% | MI DIFS | 30% |
| Mississippi | Allowed | ~521% | MS Dept of Banking | 59% |
| Missouri | Allowed | ~462% | MO Div. of Finance | No cap |
| Nevada | Allowed | ~652%+ | NV Fin. Inst. Div. | 40% |
| North Dakota | Allowed | ~521% | ND Dept of Fin. Inst. | 36% |
| Ohio | Allowed | ~28% | OH Dept of Commerce | 31% |
| Oklahoma | Allowed | ~391% | OK Dept of Cons. Credit | 56% |
| Oregon | Allowed | ~154% | OR Div. of Fin. Reg. | 36% |
| Rhode Island | Allowed | ~261% | RI Dept of Bus. Reg. | 26% |
| South Carolina | Allowed | ~391% | SC Board of Fin. Inst. | No cap |
| Tennessee | Allowed | ~460% | TN Dept of Fin. Inst. | 49% |
| Texas | Allowed | ~662%+ | TX OCCC | 35% |
| Utah | Allowed | ~652%+ | UT Dept of Fin. Inst. | No cap |
| Washington | Allowed | ~390% | WA State DFI | 29% |
| Wisconsin | Allowed | ~574%+ | WI Dept of Fin. Inst. | No cap |
| Wyoming | Allowed | ~521% | WY Div. of Banking | 30% |
Common questions about loan rules by state
Why don't all states follow the same small-dollar loan rules?
Small-dollar non-bank lending is licensed and supervised mainly by individual states, not by one federal rate statute. Every state legislature decides its own usury ceiling, maximum loan amount, rollover restriction, and rescission rights. Federal statutes like the Truth in Lending Act demand consistent cost disclosures across the nation, but states set the highest price a licensed non-bank lender may charge.
What regulated borrowing choice beats payday loan costs?
Payday Alternative Loans from federal credit unions, overseen by the National Credit Union Administration (NCUA), cost less. NCUA rules allow PALs from $200 up to $2,000, with 1- to 12-month repayment, a 28% APR ceiling, and an application fee capped at $20. Membership in the credit union is required before you apply.
What borrowing protections apply to military members currently on active duty?
Covered consumer credit for active-duty servicemembers and covered dependents is capped at 36% Military APR by the federal Military Lending Act. Interest, finance charges, credit insurance premiums, and application or participation fees all roll into that 36% all-in limit. The Act further bars lenders from making military borrowers give up legal rights or enter mandatory arbitration.
If I get a loan through a website, which state's regulations apply?
Even if its headquarters sits in another state, an online lender making loans to residents of your state is generally required to comply with your state's laws. Such lenders usually must hold a license from your state and respect its rate and fee caps. To confirm licensure, contact your state regulator or search NMLS Consumer Access at nmlsconsumeraccess.org.
What is a state rate cap or usury cap?
The usury cap is the peak annual percentage rate or fee allowed by state statute for non-bank consumer loans. With an all-in APR limit, mandatory costs like origination fees join the nominal interest rate in figuring whether the ceiling is breached. Any non-bank offer that tops the statutory limit violates state lending law.
Where can I file a complaint against a small-dollar lender?
Send your complaint to the state regulator listed in our state table and to the federal CFPB online at consumerfinance.gov. Keep your loan agreement, Truth in Lending disclosure box, and bank statements that show disputed withdrawals. State regulators examine unlicensed lending, over-the-top fees, and collection violations.
We draw small-dollar lending rules from state deferred presentment statutes, state small-loan and installment lending acts, and each state agency's official output. To make installment loan limits comparable in all 50 states, we measure the highest all-in APR on three loan benchmarks: $500 over 6 months, $2,000 over 24 months, and $10,000 over 60 months. That all-in rate covers interest, origination fees, and allowed monthly maintenance charges, pulled from state statutes and National Consumer Law Center (NCLC) state surveys. Payday Loans Reviews does not lend, broker, or give legal advice. State statutes and rules move over time, so check current limits with your state regulator.
Sources: Consumer Financial Protection Bureau (CFPB); National Credit Union Administration (NCUA); NMLS Consumer Access; Electronic Code of Federal Regulations — Regulation Z (12 CFR Part 1026); U.S. Census Bureau; National Consumer Law Center (NCLC).