Payday Loan Laws by State: Caps, Bans, Limits | Covero
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Payday Loan Laws by State: Where They Are Legal, Capped, and Banned
The same $300 payday loan can cost $4 or $60 depending on your state. Here's where payday lending is banned, where it's capped, and what every state allows.
Covero Team
Financial Content Writer
Last updated: 14 August 20269 min read
Borrow $300 for two weeks in Beloit, Wisconsin, and the fees can run $60 or more, because Wisconsin sets no limit on what payday lenders charge. Cross the state line into Illinois and that same loan legally can't cost more than about $4 in interest, since Illinois caps small loan rates at 36% APR. Same borrower, same $300, same two weeks. The only thing that changed is the state.
That's payday lending in America. There's no federal price limit, so each state decides whether payday loans exist at all, what they can cost, and how many you can hold at once. This guide maps payday loan laws across all 50 states and Washington, D.C. as of early 2026: where the product is banned, where it's capped, and where it costs the most.
Cost figures in this article are illustrative and reflect state statutes at the time of writing. Laws change, and actual costs depend on the lender and loan terms.
Where Payday Loans Are Banned or Priced Out
Eleven states and Washington, D.C. either ban payday lending outright or cap interest so low that the business model can't work. A typical payday loan charges $10 to $30 per $100 borrowed, and as the Consumer Financial Protection Bureau explains, a $15 fee per $100 on a two-week loan works out to an APR of nearly 400%. Nobody can price that product under a 24% or 30% usury cap, so in these states the storefronts simply don't exist.
State constitution caps consumer loan rates at 17%
Connecticut
Small loan rate cap of roughly 30%
District of Columbia
24% rate cap
Georgia
Banned outright, with criminal penalties for lenders
Maryland
33% APR cap on small loans
Massachusetts
Small loan cap of about 23% plus limited fees
New Jersey
30% criminal usury cap
New York
25% criminal usury cap
North Carolina
Payday law expired in 2001; 36% small loan cap
Pennsylvania
All-in cap of roughly 24% for small lenders
Vermont
18% rate cap
West Virginia
31% APR cap
One thing worth knowing: the ban follows you online. A website offering payday loans to New York or Georgia residents is bound by the same caps, and loans made above them are typically void or uncollectible. Some online operators claim tribal affiliation to sidestep state law; regulators have pursued many, and unlicensed loans come with far fewer protections.
Which States Cap Payday Loan Rates at 36%?
Ten more states let small dollar lending continue but cap the all-in rate at or near 36% APR. That number isn't random. It mirrors the federal Military Lending Act, which has capped rates on loans to active duty service members since 2006. Research from the Center for Responsible Lending has found that traditional payday lenders generally stop operating once a 36% cap takes effect. That, for the voters who passed most of these caps, was the point.
State
Rate cap
Adopted
Arizona
36%
2010
Colorado
36%
2019
Hawaii
36% plus monthly fees
2022
Illinois
36% all-in
2021
Minnesota
36% all-in
2024
Montana
36%
2011
Nebraska
36%
2020
New Hampshire
36%
2009
New Mexico
36% all-in
2023
South Dakota
36%
2016
Ballot measures drove much of this list. Colorado, Montana, Nebraska, and South Dakota all capped rates by public vote, and none of those votes were close; Nebraska's 2020 initiative passed with about 83% support. Hawaii is the odd one out on the details. Its 2022 law swapped two-week payday loans for installment loans up to $1,500, and the monthly fees it permits can push the true annual cost above 36%.
States With Cost Caps and Loan Limits
The middle group keeps payday lending legal but fences it in with dollar limits, fee caps, and cooling-off rules. Borrow in one of these states and the law decides your maximum loan as much as the lender does.
State
Max loan
Cost rules
Worth knowing
California
$300
Fee up to 15% of the check
31-day maximum term
Florida
$500
10% fee plus $5 verification fee
One loan at a time, tracked in a state database
Indiana
$550
Tiered fees, 15% down to 10%
Also capped at 20% of gross monthly income
Michigan
$600 per lender
Tiered fees, starting at 15% on the first $100
Statewide database; 31-day maximum term
Ohio
$1,000
28% interest plus capped monthly fees
Minimum 91-day term; total cost capped at 60% of principal
Oregon
No set dollar cap
36% interest plus a one-time fee up to $30
31-day minimum term
Virginia
$2,500
36% interest plus a capped monthly fee
Minimum 4-month term since 2021
Washington
$700 or 30% of monthly income
15% on the first $500, 10% above that
Eight loans per year, tracked in a database
Maine deserves a mention here too. It has no dedicated payday statute, but its roughly 30% small loan cap and flat fee limits keep the traditional product rare. Ohio and Virginia are the interesting ones in this group: both rebuilt their payday laws around longer terms and total cost caps, which ended the classic two-week loan without banning small loans entirely.
Where Are Payday Loans Most Expensive?
Then there's the loosest group. Seven states set no meaningful cap on payday loan costs, and independent research has consistently found that borrowers in these states pay the highest prices in the country.
State
Max loan
Rate cap
Worth knowing
Texas
No state maximum
None in practice
Lenders operate as brokers to sidestep rate limits
Utah
No state maximum
None
Rollovers must stop after 10 weeks
Nevada
25% of gross monthly income
None
35-day maximum term
Idaho
$1,000
None
Borrowers can request an extended payment plan
Wisconsin
$1,500 or 35% of monthly income
None
One rollover allowed
Delaware
$1,000
None
Five loans per 12-month period
Missouri
$500
Fees up to 75% of the loan amount
Up to six renewals allowed
The remaining states permit the classic two-week loan with fee caps that still translate to triple-digit APRs:
Alabama, Iowa, Kansas, Kentucky, Mississippi, North Dakota, and Tennessee cap loans at $500, with fees running roughly $15 to $22 per $100 borrowed. South Carolina is similar with a $550 limit.
Alaska allows $500 with a $5 origination charge plus up to $15 per $100.
Louisiana caps loans at $350 with fees of 16.75% of the check.
Rhode Island permits $500 at $10 per $100, about 260% APR, which makes it the cheapest of the permissive states.
Oklahoma scrapped traditional payday loans in 2020. Small installment loans up to $1,500 at up to 17% per month took their place.
Wyoming lets lenders charge the greater of $30 or 20% per month.
Here's the honest math. At $15 per $100, a $400 loan costs $60 for two weeks. Roll it over four times, which plenty of borrowers do, and you've paid $300 in fees while still owing the original $400. The rollover cycle, not the first fee, is where payday borrowing does its damage. Our guide to payday loans walks through the pricing mechanics in more detail.
This example is illustrative. Actual fees and rollover rules depend on your state, the lender, and the loan terms you agree to.
How Do Payday Loan Laws Work in Washington, Florida, and Delaware?
Three states come up constantly in payday loan searches, and each one shows a different regulatory style at work.
How many payday loans can you have in Washington state?
Eight per 12-month period. Washington caps each loan at $700 or 30% of your gross monthly income, whichever is less, with fees of 15% on the first $500 and 10% on anything above. Every loan is logged in a statewide database, so a ninth loan isn't a judgment call by the lender. The system blocks it.
The same rules apply to online payday loans in Washington state. Any lender offering them to Washington residents, storefront or website, must be licensed by the Washington State Department of Financial Institutions. So if you're hunting for the best online payday loan in Washington, the honest answer is that pricing is nearly identical by law. What actually separates lenders is licensing, and DFI's site lets you verify a license in about a minute. Washington borrowers who can't repay on time also have the right to convert the loan into an installment plan at no extra charge.
What are Florida's payday loan laws?
Florida allows single payment payday loans up to $500, with a fee of 10% plus a $5 verification fee, on terms of 7 to 31 days. You can hold only one at a time, enforced through a state database, and after repaying you wait out a 24-hour cooling-off period before borrowing again. Rollovers are banned.
Since 2018, Florida has also permitted installment-style payday loans up to $1,000, repaid over 60 to 90 days. The Florida Office of Financial Regulation licenses lenders and takes complaints.
Are online payday loans legal in Delaware?
Yes. Delaware licenses payday lenders, online and storefront alike, but it's one of the loosest states on price: no cap on rates or fees at all. Loans top out at $1,000, and you're limited to five loans in any 12-month period, rollovers included. Because nothing limits the cost, two licensed Delaware lenders can quote wildly different prices for the same loan, so read the total repayment figure carefully before you sign.
Whatever your state allows, a payday loan is rarely the cheapest tool on the table. Paycheck advance apps typically cost a few dollars rather than a few dozen; our guide to payday apps breaks down their real pricing. Small personal loans spread repayment over months instead of weeks, and many lenders fund emergency loans as soon as the next business day. Credit union payday alternative loans cap at 28% APR if you belong to one, and several other options beat a storefront loan on price in almost any state.
The Bottom Line
Payday loan laws are a patchwork, and the patchwork has real dollar consequences: the same $300 loan can cost $4 in one state and $60 next door. Before you borrow, check three things. Does your state cap the cost? What is your maximum loan amount? And is the lender licensed with your state regulator? The National Conference of State Legislatures tracks pending payday legislation, and the map keeps shifting; half a dozen states have rewritten their rules since 2020 alone.
If you're weighing your options, you can compare loan offers through Covero in a few minutes. Covero isn't a lender; it connects you with lenders in its network so you can see real terms side by side before deciding. The service is free, there's no obligation to accept any offer, and it's not available in all states.
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Eleven states plus Washington, D.C. either ban payday lending outright or cap rates so low that the product can't operate: Arkansas, Connecticut, Georgia, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Vermont, and West Virginia. Another ten states cap rates at or near 36% APR, which has pushed most traditional payday lenders out of those markets too.
Eight per 12-month period. Every loan is logged in a statewide database, so lenders can't make a ninth loan even if they wanted to. Each loan is capped at $700 or 30% of your gross monthly income, whichever is less, and borrowers who can't repay on time have the right to convert the loan into an installment plan at no extra charge.
Florida caps single payment payday loans at $500, with a fee of 10% plus a $5 verification fee, on terms of 7 to 31 days. Since 2018 the state has also allowed installment-style payday loans up to $1,000 repaid over 60 to 90 days. You can only hold one payday loan at a time, tracked through a state database.
Yes, as long as the lender is licensed in Delaware. Loans are capped at $1,000 and you're limited to five loans in any 12-month period, including rollovers. Delaware sets no cap on rates or fees, though, so costs vary widely between lenders and the total repayment figure deserves close attention before you sign.
No. A licensed lender must follow the laws of the state where you live, including rate caps and loan limits, even when it operates only online. Loans made above a state's cap are typically void or uncollectible. Some unlicensed operators claim tribal affiliation to sidestep state law; borrowing from them leaves you with far fewer protections.
The CFPB reports that payday loans commonly charge $10 to $30 per $100 borrowed, and a $15 fee per $100 on a two-week loan works out to an APR of nearly 400%. In states with 36% caps the legal maximum is far lower, while states with no cap regularly see APRs above 400%.
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