Ohio Short-Term Loans: How the 28% Cap Works for Payday and Installment Loans

Ohio has payday-style loans, but they work under a different law from older "pay on your next payday" loans. Under the Short-Term Loan Act, a short-term loan can be for at most $1,000 and must usually run at least 91 days. Interest is capped at 28% a year, and a few fees may be added on top. A short-term lender also cannot take your vehicle title as security, so title-secured short-term loans are not part of this law.

The result is a loan you repay in installments over months. It can still cost much more than 28% once the fees are counted, as the state's own numbers show below.

Short-term loans (Ohio's payday loans)

Anyone who makes or brokers a short-term loan to an Ohio borrower needs a license from the Superintendent of Financial Institutions (Ohio Rev. Code § 1321.36(A)). The main limits are:

• Amount: at most $1,000 (§ 1321.39(A)).
• Term: at least 91 days and at most one year (§ 1321.39(B)). The term can be shorter only if the total monthly payment does not exceed 6% of your verified gross monthly income or 7% of your verified net monthly income, whichever is greater.
• Interest: not more than 28% a year (§ 1321.40(A)).
• Monthly maintenance fee: at most the lesser of 10% of the original loan amount or $30 (§ 1321.40(B)(1)).
• Origination charge: on loans of $500 or more, 2% of the original loan amount (§ 1321.40(C)).
• Check fees: one collection fee per loan of up to $20 plus any amount other banks pass on for a returned check (§ 1321.40(D)). If the proceeds are paid by check, the lender may charge up to $10 to cash it (§ 1321.40(E)).

A worked example, at the limits. You borrow $500 for 91 days. Interest at 28% a year on the full $500 is up to about $34.90. The origination charge is $10. The maintenance fee is the lesser of $50 (10%) or $30, so $30 a month, or $90 over three months. That is up to about $135 in total (our arithmetic). It ignores that interest shrinks as you repay, and the other fees above. The statute states no single all-in cost cap, so read the contract's total cost line. By law, you must be warned that "the cost of this loan is higher than the average cost charged by financial institutions" (§ 1321.39).

Protections built into the law

• One loan with a lender. A short-term lender cannot make a new loan to you if you have an outstanding loan with that lender, a related company or an employee (§ 1321.41(E)).
• A $2,500 limit across lenders. The act bars loans that would push your total short-term principal above $2,500 across all licensees (§ 1321.41(R), as shown on the official code site).
• No prepayment penalty. You can pay off early without a fee (§ 1321.41(J)).
• No collateral. The lender cannot take a vehicle title, registration or other collateral as security (§ 1321.41(H)).
• A three-day cancellation. You can cancel by 5 p.m. on the third business day after the loan by returning the amount borrowed (§ 1321.39(E)).

Our state rules data for these sections comes from a legal-code site. We re-checked the amounts, term and fee lines against the official Ohio Revised Code site on October 11, 2026.

What the state's report shows

The Division of Financial Institutions' 2022 annual report counts the following for short-term loans in 2022:

• 128,187 borrowers took 278,424 loans, for $138,140,556 in total.
• The average loan was $496.15 and the average charges per loan were $50.95.
• 58,604 loans defaulted and 42,561 were charged off.
• The average contracted APR was 110.68% and the average experienced APR 75.42%, both excluding one company (as the report states).
• There were 107 licensed locations under the Short-Term Loan Act.

We list 47 payday loan stores in Ohio. That is our directory's count, not the state's, and the report is from 2022. The brands with the most Ohio listings in our data are OneMain Financial (72), Cash America Pawn (45), Lendmark Financial (36), Mariner Finance (29), Advance America (25) and ACE Cash Express (20), across all loan types.

Title loans in Ohio

A short-term lender cannot accept a vehicle title as security (§ 1321.41(H)). We list 0 title loan stores in Ohio, and we hold no rule that sets up a separate title-loan product here. Because we do not read that as a general ban, ask any lender that offers a loan secured by your car which Ohio license it operates under, and check that license (see below). Our title loans explained guide covers the risks in general.

Installment loans in Ohio

Most small-dollar borrowing here runs through three other licensing laws, each with its own rate:

• Small Loan Act: covers loans of $5,000 or less and needs a license (§ 1321.02). A licensee may charge up to 28% a year on the part of the unpaid balance up to $1,000 and up to 22% a year above $1,000 (§ 1321.13(A)).
• General Loan Law: a registrant may charge interest of up to 21% a year on the unpaid balance (§ 1321.57(A)).
• Consumer Installment Loan Act: lending under it requires a license from the Superintendent (§ 1321.63(A)(1)).

The 2022 report counted 35 licensed locations under the Small Loan Act, 257 registered under the General Loan Law and 302 licensed under the Consumer Installment Loan Act. Under the last of these, 258,453 loans worth $950,550,617 were originated that year. We list 242 installment loan stores in Ohio. See installment loans vs. payday loans for the difference, and how APR works for comparing offers.

We also list 183 pawn shops in Ohio. We hold no verified Ohio pawn rules yet, so ask the shop for its written terms.

How to check an Ohio lender's license

The Ohio Department of Commerce, Division of Financial Institutions (ODFI) licenses short-term, small-loan and installment lenders. Look up a company or office in the state's license lookup. The division's main page is on com.ohio.gov. Check online lenders the same way. Making or brokering a short-term loan to an Ohio borrower requires a license (§ 1321.36(A)).

State rules that can matter

Topic	What the rule says	Law
Amount	A short-term loan can be at most $1,000.	Ohio Rev. Code § 1321.39(A)
Term	At least 91 days (unless the payment is small relative to income) and at most one year.	Ohio Rev. Code § 1321.39(B)
Interest and fees	28% a year; monthly fee up to the lesser of 10% or $30; 2% origination on loans of $500 or more.	Ohio Rev. Code § 1321.40
One at a time	No new short-term loan from a lender that already has one open with you.	Ohio Rev. Code § 1321.41(E)
Collateral	No vehicle title, registration or other collateral.	Ohio Rev. Code § 1321.41(H)
Early payoff	No prepayment fee.	Ohio Rev. Code § 1321.41(J)
Cancellation	Cancel by 5 p.m. on the third business day by returning the amount borrowed.	Ohio Rev. Code § 1321.39(E)
Small loans	Loans of $5,000 or less: 28% a year to $1,000 and 22% above.	Ohio Rev. Code § 1321.13(A)

From our state rules data, last checked October 8, 2026, from a legal-code site; we re-checked the main amounts against the official Ohio code. Rules change. Check Ohio on the lender directory page.

Where the stores are

We list 472 lender locations in 157 Ohio cities. The most are in Columbus (44), Cincinnati (29), Cleveland (18), Youngstown (17), Toledo (16) and Dayton (13). Ohio has no city ordinances in our data. We know the hours of only 84 locations (4 open Saturday, none Sunday), so call ahead. Online options are on our online lenders page.

Options to consider first

These are general options, not recommendations of a particular provider.

• Credit union PALs. Federal credit unions may offer Payday Alternative Loans: PALs I of $200 to $1,000 for 1 to 6 months, PALs II up to $2,000 for 1 to 12 months, with an application fee of $20 at most (12 CFR 701.21(c)(7)). The rate is limited to the NCUA's ceiling, 28% when written; check the NCUA's current letter.
• Use the cancellation window. If a short-term loan turns out to cost more than you planned, you may cancel by returning the amount borrowed within three business days.
• A payment plan from the biller you are trying to cover.
• 211. Call 211 or visit 211.org for local help with rent, utilities and food.

Frequently asked questions

Are payday loans legal in Ohio?

Ohio licenses short-term loans under the Short-Term Loan Act. They are limited to $1,000, a 91-day minimum term (with an exception) and 28% interest plus set fees.

How much can I borrow in Ohio?

A short-term loan can be at most $1,000 (§ 1321.39(A)). The Small Loan Act covers loans of $5,000 or less (§ 1321.02).

Can I have two short-term loans at once?

Not from the same lender. A short-term lender cannot make a new loan to you if you have one open with it, a related company or an employee (§ 1321.41(E)). A separate $2,500 total limit applies across licensees.

Can I pay a short-term loan off early?

Yes, without a penalty. A short-term lender cannot charge a fee for paying the loan off early (§ 1321.41(J)).

Can an Ohio lender take my car title?

Not for a short-term loan. The lender cannot take a vehicle title, registration or other collateral as security (§ 1321.41(H)).

How do I know if an Ohio lender is licensed?

Search the state's license lookup. A short-term lender, or a broker arranging one, needs a license from the Superintendent of Financial Institutions (§ 1321.36(A)).

Sources

• Ohio Rev. Code § 1321.39, § 1321.40, § 1321.41, Ohio Laws and Administrative Rules, checked October 11, 2026.
• Ohio Rev. Code § 1321.36, § 1321.02, § 1321.13, § 1321.57, § 1321.63, checked October 8, 2026.
• Division of Financial Institutions annual report 2022, Ohio Department of Commerce, checked October 8, 2026.
• Ohio eLicense lookup, checked October 11, 2026.
• 12 CFR 701.21, eCFR.

We are not a lender. This is general information, not legal advice. Rules change; check Ohio's current rules and the lender's own disclosures before you borrow.