Payday loan legal status & lenders by state

Payday loans are a type of short-term loan that borrowers often use to cover unexpected expenses until their next paycheck. These loans feature high interest rates and are typically due in full by the borrower’s next payday.

See full table here: Payday Lending per state – Maximum loan amount, term and finance charge table

Which States lack specific legislation of Payday Loans?

These jurisdictions lack specific legislation regulating payday lending and/or don’t require lenders to adhere to consumer loan interest rate caps: Connecticut, Guam, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Puerto Rico, Vermont, Virgin Islands and West Virginia according to National Conference of State Legislatures.

Are Online Payday Lenders Licensed in All States?

Many online payday lenders are not licensed in all states they operate in. Both online and physical payday lenders may violate state laws.

How are Payday Loans Regulated?

Payday lending regulations vary from state to state. For instance, payday lending is marked as heavily regulated in states like Mississippi, Montana, and Nebraska.

Which States Have Made Payday Loans Illegal?

As of 2023, payday loans are illegal in:

  1. Arizona
  2. Arkansas
  3. Colorado
  4. Connecticut
  5. Georgia
  6. Maryland
  7. Massachusetts
  8. Montana
  9. Nebraska
  10. New Hampshire
  11. New Jersey
  12. New Mexico
  13. New York
  14. North Carolina
  15. Pennsylvania
  16. South Dakota
  17. Vermont
  18. West Virginia
  19. District of Columbia – First, in 1998, the District of Columbia Legislature outlawed check cashers from issuing postdated checks, and then in 2007, it finally capped small loans’ annual percentage rates (APR) at 24%. Both actions were intended to end the state’s payday lending practices.

How Many States Allow Payday Lending?

Payday lending is legal in 27 states, with 9 others permitting some form of short-term storefront lending with restrictions.

Do State Laws Apply to Online Payday Lenders?

State credit laws, rate caps, and licensing requirements apply to payday lenders that arrange loans online, according to

How Well Do States Protect Payday Loan Borrowers?

The level of protection for payday loan borrowers varies by state. Some states have stringent regulations that protect consumers from predatory lending practices, while others have less comprehensive protections. Information about each state’s protective measures can be found on