States that Allow Payday Loans Online and In Store
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At the time of writing, payday loans are legal in various states, but regulations vary widely. Here’s a breakdown of the states where payday loans are legal and common regulatory factors.
States Where Payday Loans Are Legal
The states where payday loans are allowed legally online or in store include:
Alabama, Alaska, California, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, Wyoming.
| State | Loan Amount Cap | APR / Interest Rate Cap | Rollover Restrictions | Additional Notes |
|---|---|---|---|---|
| Alabama | $500 | 456.25% APR | Yes | 10-week maximum term for payday loans. |
| Alaska | $500 | N/A | Yes | Up to 14 days for repayment, with restrictions on rollover. |
| California | $300 | 460% APR | No | Maximum term of 31 days; fees capped at 15% of principal. |
| Colorado | $500 | 36% APR | Yes | Installment payment plan required if loan is rolled over. |
| Delaware | $1,000 | N/A | Yes | Allows up to four rollovers with certain restrictions. |
| Florida | $500 | 304% APR | No | State database tracks loans to prevent multiple borrowing. |
| Hawaii | $600 | 459% APR | Yes | Repayment plans available after rollover. |
| Idaho | No cap | N/A | No | No cap on loan amount or APR; limited protections. |
| Illinois | $1,000 | 36% APR | Yes | Installment loans are limited to a six-month term. |
| Indiana | $605 | 391% APR | Yes | Capped at 20% of gross monthly income. |
| Iowa | $500 | N/A | Yes | Max two loans at a time, with 31-day repayment limit. |
| Kansas | $500 | N/A | Yes | Loan term limited to 30 days. |
| Kentucky | $500 | 400% APR | Yes | Limited to two payday loans per borrower at a time. |
| Louisiana | $350 | N/A | Yes | Rollovers allowed with restrictions. |
| Maine | $500 | 30% APR | Yes | Maximum repayment period of 30 days. |
| Michigan | $600 | 390% APR | Yes | State database tracks loan limits per borrower. |
| Minnesota | $350 | 200% APR | Yes | Allows loan renewals with additional fees. |
| Mississippi | $500 | N/A | Yes | Loan term capped at 30 days. |
| Missouri | $500 | 75% of principal | Yes | Maximum 75% APR cap on renewals. |
| Montana | $300 | 36% APR | Yes | Limited repayment period of 31 days. |
| Nebraska | $500 | 36% APR | Yes | Maximum loan term of 34 days. |
| Nevada | No cap | N/A | Yes | No cap on loan or APR; only restricted by terms. |
| New Hampshire | $500 | 36% APR | Yes | Allows installment loans with 7-day cooling-off period. |
| North Dakota | $500 | N/A | Yes | Rollover limits based on loan size. |
| Ohio | $1,000 | 28% APR | Yes | Maximum loan term of 90 days; limits on rollovers. |
| Oklahoma | $500 | N/A | Yes | Max two loans at a time; 12% monthly fee limit. |
| Oregon | $50,000 | 36% APR | Yes | Long repayment term options available. |
| Rhode Island | $500 | N/A | Yes | State limits the maximum interest rates on fees. |
| South Carolina | $550 | N/A | Yes | Rollover restricted to prevent repeated renewals. |
| South Dakota | $500 | 36% APR | Yes | Loan term of 60 days; caps interest rates. |
| Tennessee | $500 | N/A | Yes | Capped at two rollovers per loan. |
| Texas | No cap | N/A | No | No loan or APR cap; some cities impose local restrictions. |
| Utah | No cap | N/A | No | High APR; limited state regulations on payday loans. |
| Virginia | $500 | 36% APR | Yes | Max two loans at a time; installment options available. |
| Washington | $700 | N/A | Yes | Database limits borrowers to 8 loans in a 12-month period. |
| Wisconsin | No cap | N/A | Yes | No cap on loan size or APR; state tracking database. |
| Wyoming | No cap | N/A | Yes | Rollovers allowed with limited state restrictions. |
While payday loans are legal in these states, the specific regulations for in-person and online payday loans can vary. It's essential to understand the rules that apply in your state to ensure you're borrowing responsibly.
States That Don't Allow Payday Loans
On the other end, here are states across the nation that prohibit payday loans:
| State | Payday Loan Legal Status | Alternative Lending Options/Programs | Additional Notes |
|---|---|---|---|
| Arkansas | Prohibited | Credit union small-dollar loans, installment loans | State constitution limits interest rates to 17% APR. |
| Connecticut | Prohibited | Credit union loans, personal loans | State law caps APR at 12% for loans under $5,000. |
| Georgia | Prohibited | Nonprofit credit counseling, credit union loans | Very strict usury laws; payday lending is a criminal offense. |
| Maryland | Prohibited | Small consumer loans through banks, credit unions | State caps interest rates at 33% APR for small loans. |
| Massachusetts | Prohibited | Credit union loans, personal loans | APR capped at 12% for small loans. |
| New Jersey | Prohibited | Credit union small loans, community-based loans | APR cap set at 30% for consumer loans. |
| New York | Prohibited | Credit union PAL loans, installment loans | Strict usury law limits small loans to 25% APR. |
| North Carolina | Prohibited | State Employee Credit Union loans, credit union small loans | Payday lending was banned in 2001. |
| Pennsylvania | Prohibited | Credit union PAL loans, installment loans | Interest rate cap of 24% for loans under $25,000. |
| Vermont | Prohibited | Community loan funds, credit union small-dollar loans | State laws prohibit payday lending entirely. |
| West Virginia | Prohibited | Credit union loans, small personal loans | Interest rates are capped by state usury laws. |
Key State Regulations and Laws
Each state has unique payday lending laws, typically focused on these aspects:
- Loan amount caps. Some states limit the maximum amount a lender can offer, generally ranging from $200 to $1,000.
- Interest rate caps. High interest rates are a common concern with payday loans, and certain states have introduced caps to limit how much lenders can charge, with some capping APRs around 36%.
- Rollover restrictions. To prevent extended cycles of debt, some states restrict the ability to “rollover” or extend a payday loan beyond the original term.
- Cooling-off periods. Certain states mandate waiting periods between loans to help borrowers avoid immediate re-borrowing after paying off a payday loan.
Due to these differences, it’s essential to familiarize yourself with your state’s payday lending laws before committing to a loan. State websites or local consumer protection agencies can provide detailed information on specific regulations.
Alternatives to Payday Loans
If you’re considering a payday loan, evaluating other options might save you from potential financial pitfalls. Alternatives include:
- Borrowing from friends or family. If feasible, borrowing from close contacts could be interest-free or at least lower-cost.
- Personal installment loans. Many lenders, including Simple Fast Loans, offer online installment loans with longer repayment terms and lower interest rates.
- Credit union loans. Local credit unions often provide small-dollar loans with reasonable interest rates and terms, and may have programs to assist members in financial need.
When considering any loan, always weigh the benefits and risks, ensuring you’re well-informed about the legalities and long-term effects on your finances.
Note: The content provided in this article is for informational purposes only. Contact your financial advisor regarding your specific financial situation.
