Last updated on February 18th, 2026 at 04:33 pm
There are many laws and guidelines regulating payday loans across the US. As of 2025, 18 states and the District of Columbia have either banned payday loans outright or effectively eliminated traditional payday lending through strict rate caps (typically 36% APR). The remaining states permit payday lending with varying degrees of regulation.
The Federal Truth in Lending Act regulates payday lending alongside all other loan and credit products. It states that:
- The borrower must know and be advised of the total cost of the loan
- The lender must state the commission amount that they will receive
- The APR (annual percentage rate) must be stated.
- All details of the loan must be confirmed in writing before the loan can be authorized by the borrower.
CFPB March 2025 Rule: In addition to state laws, the CFPB’s payday lending rule took effect on March 30, 2025. This rule limits lenders to two attempts at withdrawing payment from a borrower’s bank account. After two failed withdrawal attempts, the lender must obtain specific authorization from the borrower before trying again.
Below we have listed the laws and governing codes for each state in the US where payday loans remain legal.
What Are The Laws In Each State?
Note: Several states in this table have enacted stricter regulations since 2022, including 36% APR caps that effectively eliminate traditional high-cost payday lending. States marked with an asterisk (*) have enacted 36% APR caps. Always check your state’s current laws before borrowing.
| State | Regulation | Loan amount (max), $ | Loan term (max) | APR | Charges |
| Alabama Payday Loans | Alabama Code Title 5. Banks and Financial Institutions § 5-18A-1 | 500 | 31 days | 456% | Max fee is 17.5% |
| Alaska | LICENSEE PRACTICES AND RECIPIENT RESCISSION AND PAYMENT AS 06.50.400 – AS 06.50.560 |
500 | 14 days | 435% | 15% of the amount advanced |
| California Payday Loan | California Code, Financial Code – FIN § 23000 | 300 | 31 days | 460% | 15% of the amount advanced |
| Colorado* | Colorado Revised Statutes TITLE 5 | 500 | 6 months | 36%* | 36% APR cap enacted via 2018 ballot initiative |
| Delaware | TITLE 5 – Banking – CHAPTER 22. Licensed Lenders | 1000 | 60 days | 521% | No limit for finance charges; 5 loan limit for 12 months |
| Florida | 560.402 – REGULATION OF TRADE, COMMERCE, INVESTMENTS, AND SOLICITATIONS | 500 | 31 days | 304% | 10% charge; One loan limit at a time; No roll-over allowed |
| Hawaii | Hawaii Revised Statutes Division 2. Business § 480F-1 | 600 | 32 days | 460% | 15% of the amount advanced; One loan limit at a time; No roll-over allowed |
| Idaho | Idaho – Commercial transactions – Title 28 | 1000 | Not specified | 652% | A loan cannot exceed 25% of borrower’s gross monthly income |
| Illinois* | Predatory Loan Prevention Act (2021) & Payday Loan Reform Act (815 ILCS 122/) | 1000 or 25% of gross income | Up to 120 days | 36%* | 36% APR cap on all consumer loans (2021 Predatory Loan Prevention Act) |
| Indiana | Indiana Code Title 24. Trade Regulation § 24-4.5-7-101 | 550 or 20% of gross income | Not specified | 382% | 10%, 13% or 15% finance charge depending on amount advanced; No roll-over allowed |
| Iowa | Iowa Code Title XIII – COMMERCE Chapter 533D | 500 | 31 days | 337% | 15% finance charge on the loan up to $100 and only 10% on subsequent $100 |
| Kansas | Kan. Stat. Ann. § 16a-2-404, 405 | 500 | 30 days | 391% | 15% of the amount advanced; No roll-over allowed; 2 loans at a time |
| Kentucky | Kentucky Rev. Stat. Ann. §§ 286.9.010 et seq. | 500 | 60 days | 460% | 15% finance charge of $100; No roll-over allowed |
| Louisiana | Louisiana Laws Revised Statutes TITLE 9 RS 9:3578.1 | 350 | 30 days | 391% | 16.75% of the amount advanced |
| Maine | Title 9-A: MAINE CONSUMER CREDIT CODE | 2000 | Not specified | 30% (actually 217%) | Small loan rate cap |
| Michigan | Mich. Comp. Laws §§ 487.2121 et seq. | 600 | 31 days | 369% | Two loans at a time allowed; 15%-11% finance charge |
| Minnesota | Minnesota Statutes – Section 47.60 – Consumer Small Loans | 350 | 30 days | 200% | Finance charge varies depending on amount of a loan |
| Mississippi | Title 75. REGULATION OF TRADE, COMMERCE AND INVESTMENTS | 500 | 30 days | 521% | Finance charge 20%-21.95% for $100; No roll-over allowed |
| Missouri | Mo. Rev. Stat. §§ 408.500.1 et seq. | 500 | 31 days | 443% | Finance charges should not exceed 75% of initial loan amount; 6 roll-overs allowed |
| Montana* | TITLE 31. CREDIT TRANSACTIONS AND RELATIONSHIPS | 300 | 31 days | 36%* | 36% APR cap (2010 ballot initiative) |
| Nebraska* | Neb. Stat. Ann. §§ 45-901 | 500 | 34 days | 36%* | 36% APR cap (2020 ballot initiative); No roll-over allowed |
| Nevada | CHAPTER 604A – DEFERRED DEPOSIT LOANS, HIGH-INTEREST LOANS, TITLE LOANS AND CHECK-CASHING SERVICES. | 25% of monthly gross income | 35 days | No limit | Real APR 625%; No restriction to a number of loans |
| North Dakota | CHAPTER 13-08 DEFERRED PRESENTMENT SERVICE PROVIDERS Code 13-08-01 et seq. | 500 | 60 days | 487% | 20% of the amount advanced |
| Ohio | Ohio Rev. Code Ann. 1321.35 et seq. | 1000 | 1 year | 28% | One loan is allowed at a time; No roll-over allowed |
| Oklahoma | Okla. Stat. Tit. 59 §§ 3101 et seq. | 500 | 45 days | 395% | 10%-15% finance charge |
| Oregon | Chapter 725A — Short-Term Loans and Student Loan Servicing | 50,000 | 60 days | 154% | Finance charges are capped at 36% |
| Rhode Island | R.I. Stat. Ann. 19-14.4-1 et seq. | 500 | Not specified | 261% | 10% on the amount advanced |
| South Carolina | S.C. Code §§ 34-39-110 et seq. | 550 | 31 days | 391% | 10% on the amount advanced |
| South Dakota* | S.D. Codified Laws 54-4-36 et seq. | 500 | Not specified | 36%* | 36% APR cap (2016 ballot initiative) |
| Tennessee | Consumer Notice Deferred Presentment Services Act | 500 | 31 days | 460% | 15% of the amount of the check |
| Texas | TITLE 5. PROTECTION OF CONSUMERS OF FINANCIAL SERVICE – CHAPTER 393 | Not specified | Not fixed | 662% | Finance charge varies depending on amount of a loan; No roll-over allowed |
| Utah | Utah Code Ann. 7-23-101 et seq. | No limit | 70 days | 658% | No limits on finance charges |
| Virginia* | Va. Code Ann. §§ 6.2-1800 et seq. (reformed by Fairness in Lending Act, 2020) | 2,500 | Up to 24 months | 36%* | 36% APR cap + 8% fee (Virginia Fairness in Lending Act, effective Jan 2021) |
| Washington | Wash. Rev. Code Ann. 31.45.010 et seq. | 700 or 30% of gross monthly income | 45 days | 391% | 10%-15% finance charges; no roll-over |
| Wisconsin | Wis. Stat. 138.14 | 1500 or 35% of gross monthly income | 90 days | 547% | 2.75% monthly finance charge; 2 renewals allowed |
| Wyoming | Wy. Stat. 40-14-362 et seq. | Not specified | 1 month | 261% | 20%-30% finance charges per month |
* States that have enacted 36% APR caps, effectively eliminating traditional high-cost payday lending.
Frequently Asked Questions
How many states ban payday loans?
As of 2025, 18 states and the District of Columbia have either banned payday loans outright or effectively eliminated traditional payday lending through strict rate caps (typically 36% APR). The remaining states permit payday lending with varying degrees of regulation.
What is the maximum APR for payday loans?
APR varies widely by state. Some states like Utah and Nevada have no APR cap, where rates can exceed 650%. States like Colorado, Montana, and Virginia have enacted 36% APR caps that effectively eliminate high-cost payday lending.
What federal laws regulate payday loans?
The Federal Truth in Lending Act requires lenders to disclose the full cost of a loan, including the APR and all fees. Additionally, the CFPB’s payday lending rule (effective March 2025) limits lenders to two consecutive failed payment withdrawal attempts before requiring new borrower authorization.
Can payday loan laws change?
Yes, state payday loan laws are frequently updated. Several states have enacted 36% APR caps through ballot initiatives in recent years, including Colorado (2018), South Dakota (2016), Nebraska (2020), and Virginia (2021). Always check your state’s current regulations before borrowing.
