All of the lenders in our network are required to adhere to the regulations that govern short-term loans in each state. Some of the terms that individual states control include the maximum loan amounts, the amount of fees or interest that a lender can charge, the number of loans that can be outstanding at any given time and the number of simultaneous loans, and even the amount that lenders are allowed to charge for non-sufficient funds and the terms for non-payment and late payment actions.
DirectLoansLenders have compiled a list of states, the maximum loan amounts in those states, and the regulations they have in place for your convenience. These regulations are subject to changes, so the list is not exhaustive and gives only the general information regarding the regulations in each state. For more details, please, use the links at the bottom of the page to check the current regulations in each state via governmental websites and authorized resources.
This table lists the state, the maximum loan amount and the regulations in that state.
|State||Loan Amount||Applicable Details|
|Alabama||$500||Interest rate should not exceed 17.50%; 3% per month after default.|
|Alaska||$500||Interest rate $5 + the lesser of $15 per $100 or 15%.|
|California||$255 if maximum fee charged ($300 maximum check)||Interest rate is 15% of check.|
|Colorado||$500||Lenders can charge a fee of 20%: $0-$300 + 7.5%: $301-$500 plus 45% APR; plus monthly maintenance fee $7.50 per $100 borrowed, up to $30, after first month.|
|District of Columbia||Prohibited||N/A|
|Florida||$500||10% of check + verification fee not to exceed $5.|
|Hawaii||$600||Interest may not exceed 15% of a check.|
|Idaho||$1000 (loan cannot exceed 25% of gross monthly income of borrower)||Not Specified|
|Illinois||Lesser of $1000 or 25% gross monthly income. Payday installment loan lesser of 22.5% gross monthly income or $1,000.||$15.50 per $100, plus a $1 verification fee.|
|Indiana||$550 (not to exceed 20% of borrower’s monthly gross income)||Lenders’ charge cannot go beyond 15% interest on the first $250, 13% on amounts between $251 and $400, and 10% on amounts between $401 and $550.|
|Iowa||$500||Lenders may charge not more than 15% on the first $100 of the loan or more than 10% on each consecutive $100.|
|Kansas||$500||Lenders may not charge more than 15% interest and an additional 3% per month after the loan maturity date. No additional charges are allowed with the exception of returned check fees.|
|Kentucky||$500||Lenders shall not charge a service fee over $15 per $100 on the target value of the deferred deposit check.Lenders shall prorate any fee, based upon the maximum fee of $15.|
|Louisiana||$350||Lenders may charge a fee not exceeding 16.75 % of the target value of the check issued.|
|Michigan||$600||Lender’s charges cannot exceed 15% of the first $100, 14% of the second $100, 13% of the third $100, 12% of the fourth $100 and 11% of the fifth and sixth $100.|
|Minnesota||$350||Lenders may impose a $5.50 charge on loans up to and including $50. They may charge 10% of the loan amount as well as a $5 service fee on amounts between $51 and $100. They may charge 7% and a $5 service fee on amounts between $101 and $250. They may charge 6% and a $5 service fee on amounts between $251 and $300. Lenders may not charge more than 2.75% as late fees.|
|Mississippi||$500||Interest rates under $250: $20 per $100 advanced; $250-500: $21.95 per $100 advanced.|
|Missouri||$500||Collection fees and interest may not exceed 75% of the loan amount at any time.|
|Montana||$300, up to 25% of monthly net income of borrower||APR should not exceed 36%.|
|Nebraska||$500||$15 per $100 or in proportion for any part thereof on amount of check.|
|Nevada||25% of expected gross monthly income||Not Specified (after default: interest rate must be equal to or less than the prime rate at the largest bank in the State of Nevada plus 10%).|
|New Hampshire||$500||The APR for payday loans shall not exceed 36%.|
|New Mexico||$2500||$15.50 per $100; $.50 verification fee per $100.|
|North Dakota||$500||Lenders may not charge more than 20%.|
|Ohio||$500||Interest rate should not exceed 28%.|
|Oklahoma||$500||$15 per $100: $0-$300; an additional fee of $10 per $100: $301-$500.|
|Oregon||$50,000 (loan limit up to 25% of borrower’s net monthly income if earns $60,000 per year or less)||Lenders cannot charge more than 36% interest. Service charges cannot exceed 10% of the loan or $30, whichever is less.|
|Rhode Island||$500||Lenders may not charge more than 10% interest.|
|South Carolina||$550||Lenders may not charge more than 15% interest.|
|South Dakota||$500||36% APR interest.|
|Tennessee||$425 ($500 check)||15% of the nominal value of the check.|
|Texas||Not specified||Lender’s interest should not exceed 10%.|
|Utah||No Limit||No Limit|
|Virginia||$500||36% annual interest + $5 verification fee + 20% of loan.|
|Washington||$700 or 30% of gross monthly income, whichever is less||15% – first $500; 10% – remaining portion of the loan in excess of $500 up to the $700 maximum.|
|Wisconsin||Lesser of $1,500 including fees or 35% gross monthly income||There are no regulations that control interest, but lenders may not penalize borrowers for repaying their debts early.|
|Wyoming||Not Specified||The greater of 20% per month or $30.|
Follow the link to this official website and this resource to get all the necessary information regarding the regulations in your state.
The states in which short term cash loans are prohibited are: Arkansas, Arizona, Connecticut, District of Columbia, Georgia, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Vermont, and West Virginia (this list is not exhaustive, the regulations in each state vary and are subject to changes).
Representative APR Range
DirectLoansLenders is not a lender and does not provide short-term loans but refers consumers to the lenders who may provide such loans. DirectLoansLenders is unable to supply you with an exact APR (Annual Percentage Rate) that you will be charged if you are approved for a loan. The APRs vary according to the information supplied by you in your loan request and your lender. You will be given the APR, loan fees, and other terms by your lender when you are redirected to your loan agreement in the loan request process. Payday loans are relatively expensive when compared with other loan products. Payday loans are not recommended as a long-term financial solution and they should only be taken for emergency financial needs.
The APR on a short-term loan can range from 212% to 1,890% depending on how the APR is calculated (nominal vs. effective), the duration of the loan, loan fees incurred, late payment fees, non-payment fees, loan renewal actions, and other factors. Keep in mind that the APR range is not your finance charge and your finance charge will be disclosed later on.
Payday Loans APR Calculation Representative Example
Borrow $200 for 14 days with a $30 to $60 lender fee. Your estimated APR is 391% to 782%
Calculation: (lender fee / loan amount) x (amount of days in a year / duration of the loan) x 100
Low End of Range: ($30 / $200) * (365 days / 14 days) x 100 = 391.07%
High End of Range: ($60 / $200) * (365 days / 14 days) x 100 = 782.14%
Financial Implication and Penalties
Implications of Late Payment
You are encouraged to contact your lender as soon as possible if you are unable to repay your loan on the scheduled repayment date. Your lender will set its own late payment fees in accordance with state regulations. Your lender may have several courses of action available if your payment is late. For more information about your lender’s specific procedures as they apply to late payments, please, review your loan agreement or contact your lender directly.
Implications of Non-Payment
The costs associated with loans of up to $500 can range from 15% to 40% of the entire loan amount, and the charges associated with loans of more than $500 can be even more. Your lender may also charge late fees as well as fees for non-sufficient funds. As an example, your lender may charge you a $20 insufficient funds fee as well as 15% of the loan balance as a late fee. Please review your loan agreement carefully for information about the financial implications of non-payment before you provide your electronic signature.
The majority of the lenders in our network will not sell your debt to outside collection agencies. Instead, they may attempt to collect the debt in-house via telephone, email, postal mail or even text message. Similarly, they will not threaten criminal charges or sue borrowers; they will generally offer debt settlements over time instead. Every lender in our network is required to adhere to the Fair Debt Collection Practices Act which protects consumers from being abused or harassed by debt collectors.
Impact on Credit Score
Lenders have the right to report your failure to repay a loan to one or all of the major credit reporting agencies — Experian, Equifax, and Transunion. This negative report will be reflected on your credit history indefinitely until the loan is repaid in full. After the lender has received the payment in full, they can report this to the credit reporting agencies and the report may be removed from your record.
Some of the lenders in our network may automatically renew your loan if it becomes past the due date. You should check your loan agreement for your lender’s policy on automatic loan renewal prior to e-signing your loan agreement. If your loan is renewed, there will be additional charges as determined by your lender, and the minimum term can be set up. Your lender may offer you other options in addition to renewal, including the ability to repay your loan in full at a later date or repay your loan over time in a series of installments.
References and Sources
1. Legal Status of Payday Loans by State. Retrieved from https://paydayloaninfo.org/state-information
2. Heather Morton, (1/23/2018). Payday Lending State Statutes. Retrieved from http://www.ncsl.org/research/financial-services-and-commerce/payday-lending-state-statutes.aspx
3. Fair Debt Collection Practices Act. Retrieved from https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text