Installment Loans in Vermont

Lending rules in Vermont

General rules

• Persons who lend (other than residential mortgage loans) less than $250,000.00 in total in a year at no more than 12 percent per annum do not need a lender license. Source: 8 V.S.A. § 2201(d)(10) · verified Oct 9, 2026
• Without a license from the Commissioner of Financial Regulation, a person cannot engage in the business of making loans and charging interest, a finance charge, a discount or other consideration. Source: 8 V.S.A. § 2201(a)(1) · verified Oct 9, 2026
• Pawnbrokers, depository institutions, insurance companies and sellers financing their own goods or services are exempt from the lender license. Source: 8 V.S.A. § 2201(d)(4)-(7) · verified Oct 9, 2026
• A loan solicited or made by mail, telephone, or electronic means to a Vermont resident is subject to the lender licensing chapter wherever the loan was made, and the lender needs no Vermont place of business. Source: 8 V.S.A. § 2233(b) · verified Oct 9, 2026
• A licensed lender cannot charge or receive any interest, discount or charge greater than 9 V.S.A. § 41a or 46 authorizes, and a loan that exceeds those rates cannot be enforced in Vermont. Source: 8 V.S.A. § 2233(a) · verified Oct 9, 2026
• It is an unfair and deceptive act and practice in commerce for a lender to solicit or make a loan to a consumer unless the lender complies with the licensed lender chapter (8 V.S.A. ch. 73) or is exempt. Payment processors that handle such loans are covered too. Source: 9 V.S.A. § 2481w(b), (c) · verified Oct 9, 2026

Title loans

• A loan secured by a motor vehicle, mobile home, travel trailer, aircraft, watercraft or farm equipment of the current or previous model year cannot carry interest above 18 percent per annum (20 percent if the collateral is older). Source: 9 V.S.A. § 41a(b)(4) · verified Oct 9, 2026

Installment and consumer finance loans

• Loan contracts made by licensed lenders must require repayment in substantially equal consecutive monthly installments of principal and interest combined (except loans under section 2216 and as the Commissioner's regulations allow). Source: 8 V.S.A. § 2231(a) · verified Oct 9, 2026
• On non-mortgage loans a licensed lender cannot charge any further examination, service, brokerage, commission, expense, fee or bonus beyond the interest and charges provided, other than public filing and recording fees and credit insurance premiums. Excess charges void the loan contract. Source: 8 V.S.A. § 2231(b) · verified Oct 9, 2026
• Unless the law provides otherwise, the rate of interest or sum allowed for forbearance or use of money is 12 percent per annum, computed by the actuarial method. Source: 9 V.S.A. § 41a(a) · verified Oct 9, 2026
• For single payment loans by lenders regulated by Title 8 (such as licensed lenders), the finance charge cannot exceed 18 percent per annum. Source: 9 V.S.A. § 41a(b)(1) · verified Oct 9, 2026
• For an installment loan not otherwise limited, the interest rate cannot exceed 24 percent per annum on the first $1,000.00 of the aggregate balance outstanding and 12 percent per annum on the balance over $1,000.00, or 18 percent annual percentage rate on the whole balance, whichever is higher. Source: 9 V.S.A. § 41a(b)(5) · verified Oct 9, 2026
• Interest on closed-end loans is computed only on the outstanding balance by the actuarial method, on a 365-day year, and cannot be paid, deducted or added to principal in advance (except up to 30 days on a mortgage loan). Source: 9 V.S.A. § 41a(d)(1) · verified Oct 9, 2026

Pawn loans

• The annual pawnbroker license fee is $15.00 for the use of the town. Source: 9 V.S.A. § 3863 · verified Oct 9, 2026
• A pawnbroker files a bond of $500.00 with the town or city when licensed. Source: 9 V.S.A. § 3863 · verified Oct 9, 2026
• A pawnbroker needs a license from the selectboard of a town or the aldermen of a city, which names the one place of business. The fee is $15.00 a year and the licensee files a $500.00 bond. Source: 9 V.S.A. § 3862(b), 3863 · verified Oct 9, 2026
• A pawnbroker cannot charge more than 3 percent per month on a loan over $50.00 (5 percent per month or fraction of a month on a loan of $50.00 or less), and no charge of less than $0.15 on any loan. Source: 9 V.S.A. § 3867 · verified Oct 9, 2026
• On a pawn loan of $50.00 or less the interest cannot exceed 5 percent per month or fraction of a month. Source: 9 V.S.A. § 3867 · verified Oct 9, 2026
• A pawnbroker cannot sell pawned property until it has remained in the pawnbroker's possession six months without redemption. Source: 9 V.S.A. § 3868 · verified Oct 9, 2026
• A pawnbroker cannot accept a pledge from a person under 18 without written authority of a parent or guardian. Source: 9 V.S.A. § 3870 · verified Oct 9, 2026

Lenders in Vermont are licensed by the Vermont Department of Financial Regulation (DFR), Banking Division. See also online lenders and apps in Vermont.