Many times I’ve been asked the question, “which states are the BEST states for Payday Loans”. Now, it’s almost impossible to answer a question that vague, but I do want to provide an updated list of which states Payday Loans are still legal and include a little information about some restrictions that may exist.
Especially if you are a lender, please go above and beyond just researching an online Cash Advance Laws list. Although I have made best efforts to provide current and reliable information (including notes on states that are currently considering new laws) there is almost always some type of regulatory action taking place. I would encourage anyone who wants more than an overview to also pick up the phone and call the state’s regulator. Double-check, triple-check nearly every bit of information given comparatively to actual current state laws. Don’t take every bit of advice at face value, as I have encountered several situations in which state regulators did not know specific laws or examples, while I was working on state specific payday loan software solutions. Seek legal counsel, if possible, to avoid any costly mistakes in misinterpreting current Payday Lending Laws yourself. There is no substitute for proper preparation and education in this industry!
Alabama
Legal
Max Loan Amount: $500
Max Charge/APR% for a 14 Day Loan ($100): $17.50/456.25%
Term: 10 to 31 Days
Rollovers Allowed: One
Alaska
Legal
Max Loan Amount: $500
Max Charge/APR% for a 14 Day Loan ($100): $20/520%
Term: Minimum 14 days
Rollovers Allowed: Two
Arizona
Capped at 36% APR as of June 30th 2010… So, “virtually” prohibited, or “regulated out of existence” as I like to refer to these 36% APR caps!
Arkansas
Legal (For Check Cashers Only)
Max Loan Amount: $500
Max Charge/APR% for a 14 Day Loan ($100): $20/520%
Term: Minimum 14 days
Rollovers Allowed: Two
*Editors Note* – Arkansas has placed tight restrictions on the average payday lender, making it very tough to run a Payday Loan Business in Arkansas. Many people have turned to internet lenders to find access to short-term credit.
California
Legal
Max Loan Amount: $300
Max Charge/APR% for a 14 Day Loan ($100): $17.65/459%
Term: Maximum 31 days
Rollovers Allowed: None and no fee for extensions
Colorado
There have been some very recent changes to laws in Colorado, which makes it tough at this point to pin down all of the specifics as House Bill 1351 passed just weeks ago. In my opinion, the changes to loan terms mean that payday loans are now “illegal” but I’m not certain as to how Colorado spells it out in their bill. Some details include:
-The Loan Terms are now limited to a range of 6 months to a year
-Lenders can charge a $75 origination fee and monthly fees up to $30/45% in interest
I will provide some updates when more information arises, or if any readers have more info please feel welcome to comment.
Connecticut
Prohibited
Delaware
Legal (permitted under small loan act or licensing law)
Max Loan Amount: $500
Max Charge/APR% for a 14 Day Loan ($100): No Limit
Term: Maximum 60 days
Rollovers Allowed: Four
Florida
Legal
Max Loan Amount: $500
Max Charge/APR% for a 14 Day Loan ($100): $15/390%
Term: 7-31 days
Rollovers Allowed: None
Georgia
Prohibited
Hawaii
Legal (For Check Cashers Only)
Max Loan Amount: $600
Max Charge/APR% for a 14 Day Loan ($100): $17.65/459%
Term: Maximum 32 days
Rollovers Allowed: None
Idaho
Legal
Max Loan Amount: $1000
Max Charge/APR% for a 14 Day Loan ($100): No Limit
Term: Not Specified
Rollovers Allowed: Three
Illinois
Legal
Max Loan Amount: $1000 of 25% of Gross Monthly Income, whichever is LESS
Max Charge/APR% for a 14 Day Loan ($100): $15.50/403%
Term: 13-45 days
Rollovers Allowed: None
Indiana
Legal
Max Loan Amount: $550
Max Charge/APR% for a 14 Day Loan ($100): $15/390%
Term: Minimum 14 days
Rollovers Allowed: None
Iowa
Legal
Max Loan Amount: $500
Max Charge/APR% for a 14 Day Loan ($100): $16.67/433%
Term: Maximum 31 days
Rollovers Allowed: None
Kansas
Legal
Max Loan Amount: $500
Max Charge/APR% for a 14 Day Loan ($100): $15/390%
Term: 7-30 days
Rollovers Allowed: Not Specified
Kentucky
Legal (For Check Cashers Only)
Max Loan Amount: $500
Max Charge/APR% for a 14 Day Loan ($100): $17.65/459%
Term: Minimum 14-60 days
Rollovers Allowed: None
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