Where Are Payday Loans Legal? A State-by-State Guide
Payday loans are legal in some states and not in others, because each state writes its own rules. By our count of verified state laws, 28 states allow payday loans under a state law with its own limits, while Georgia makes them unlawful, Arizona and the District of Columbia no longer license payday lenders, the regulators in West Virginia and Hawaii say payday loans are prohibited, and 15 more states have rate caps under which we list no payday stores. We have not yet verified the rules in Alaska, Maine and New Hampshire.
This guide sorts every state into those groups and names the law behind each one, so you can check it yourself.
Why the answer depends on your state
A payday loan is usually a short-term, high-cost loan, generally for $500 or less, that is typically due on your next payday. That is how the Consumer Financial Protection Bureau (CFPB) describes it. There is no federal law that sets one price or one maximum amount for everyone. States decide, and they take very different approaches:
- A payday law with limits. Most states that allow payday loans have a law for them, often called deferred presentment or deferred deposit, with a maximum loan, a fee cap and a maximum term.
- A rate cap. Some states cap interest at a level, often 36% a year, at which a typical two-week payday loan does not work. Some of these states still have a payday law, but with a low cap. Others never had one.
- A ban, a repeal or an expired law. A few states make payday lending unlawful, or let the law that allowed it end.
The words matter. We say "prohibited" only where the law itself says unlawful or prohibited. Where a law was repealed or expired, we say the state "no longer licenses" payday lenders.
Where payday loans are not available
Prohibited
- Georgia. It is unlawful to make, offer or arrange loans of $3,000 or less unless the lender operates under an exempt law, such as a bank, credit union, installment lender or pawnbroker (O.C.G.A. § 16-17-2).
No longer licensed
- Arizona. The law that allowed payday lending expired on June 30, 2010, and the state no longer licenses payday lenders (Arizona DIFI FAQ).
- District of Columbia. The definition of deferred deposit was repealed in 2007, and the code says no licensee shall cash or advance any monies on a post-dated check (D.C. Code § 26-319(b)).
Prohibited, according to the state regulator
- West Virginia. The Division of Financial Institutions says: "Traditional 'Payday Lenders' are generally prohibited within this state" (WV DFI, Consumers).
- Hawaii. Act 56 of 2021 replaced the deferred deposit (payday) law with a small dollar loan law. The Division of Financial Institutions says: "Can I still take out a payday loan? No. The new law prohibits payday loans." (Hawaii DFI, Consumer FAQ).
Rate caps, and we list no payday stores
In these 15 states, a rate cap applies and our directory lists no payday loan stores. In Colorado, Minnesota, Montana and Nebraska the cap is written into the state's own payday law. In the others it is a general or small-loan cap.
| State | The cap | Law |
|---|---|---|
| Arkansas | The maximum lawful rate of interest on any loan or contract other than loans by federally insured depository institutions is 17 percent a year. | Ark. Const. amend. 89, § 3 |
| Colorado | The finance charge on a payday (deferred deposit) loan cannot exceed an annual percentage rate of 36 percent, and a lender may charge only the charges the Deferred Deposit Loan Act expressly allows. | Colo. Rev. Stat. 5-3.1-105 |
| Connecticut | A small loan under $5,000 may not carry an APR above 36 percent (or the lower Military Lending Act rate). | Conn. Gen. Stat. § 36a-558(d)(1) |
| Maryland | Under the general interest subtitle a lender may charge at most 24 percent a year simple interest on loans made after July 1, 1982 that are unsecured or secured by other than a savings account. | Md. Code, Com. Law § 12-103(a)(3) |
| Massachusetts | Regulation 209 CMR 26.00 limits the annual interest rate on small loans to 23 percent. | 209 CMR 26.00 |
| Minnesota | A consumer small loan lender may charge an annual percentage rate of up to 50 percent, and no other charges or payments are permitted. | Minn. Stat. § 47.60, subd. 2(a) |
| Montana | A deferred deposit loan licensee may not charge a fee exceeding 36% per annum. | Mont. Code Ann. § 31-1-722(2) |
| Nebraska | A delayed deposit licensee may not charge an annual percentage rate above 36 percent, and a transaction made above that rate is void. | Neb. Rev. Stat. § 45-918(1) |
| New Jersey | A loan at more than 30 percent a year is not at a rate authorized or permitted by law, so charging it is criminal usury (50 percent if the borrower is a corporation or LLC). | N.J.S.A. 2C:21-19(a) |
| New Mexico | A New Mexico small loan lender cannot make a loan with an annual percentage rate (including fees and add-on products) above 36 percent. If the prime rate stays above 10 percent for three months, the cap rises by the number of points prime is above 10. | NMSA 58-15-17(J), (L) |
| New York | Charging interest above 25 percent a year is criminal usury in the second degree, a class E felony, unless the lender is authorized or permitted by law to do so. | N.Y. Penal Law § 190.40 |
| North Carolina | A Consumer Finance Act licensee making an installment loan of $12,000 or less (up to $25,000 total, 12 to 96 months) may charge up to 33 percent a year on the first $4,000 of unpaid balance, 24 percent on the next $4,000 and 18 percent on the rest. | N.C. Gen. Stat. § 53-176(a)(1) |
| Pennsylvania | A licensed consumer discount company may charge interest or discount of up to $9.50 per $100 of the loan's face amount per year, computed up front for the full term. The statute states this add-on rate, not an APR. | 7 P.S. § 6213(E) |
| South Dakota | Initiated Measure 21 prohibits all state-licensed money lenders from making a loan with total interest, fees, and charges at an annual percentage rate greater than 36%. This applies to all loans originated, refinanced, rolled over, renewed, or flipped after November 15, 2016. | Initiated Measure 21 (2016) |
| Vermont | 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. | 9 V.S.A. § 41a(b)(5) |
Where payday loans are allowed under state law
These 28 states have a law that allows payday loans or a close equivalent, each with its own limits. The table shows one or two of the rules that matter most. Each state's page in our directory lists the rest, along with the stores we know of.
| State | Key rules | Law |
|---|---|---|
| Alabama | A payday (deferred presentment) advance can be at most $500. The fee on a deferred presentment transaction can be at most 17.5 percent of the amount advanced. | Ala. Code § 5-18A-12(a) |
| California | A payday loan (deferred deposit transaction) can have a check face amount of at most $300. The fee on a payday loan cannot exceed 15 percent of the check's face amount. | Cal. Fin. Code § 23035(a); Cal. Fin. Code § 23036(a) |
| Delaware | A short-term consumer loan can be at most $1,000. Delaware has no statutory rate cap on short-term consumer (payday) loans. 5 Del. C. § 2229 lets a licensee charge interest at "such daily, weekly, monthly, annual or other periodic percentage rate or rates as the agreement governing the loan provides." | 5 Del. C. § 2227(7); 5 Del. C. § 2229 |
| Florida | A single-payment payday loan can have a check face amount of at most $500, not counting fees. Fees on a single-payment payday loan cannot exceed 10 percent of the cash or payment instrument the borrower receives. | Fla. Stat. § 560.404(5); Fla. Stat. § 560.404(6)(a) |
| Idaho | The maximum principal amount of any payday loan in Idaho is $1,000. A payday lender cannot make a payday loan that exceeds 25 percent of the borrower's gross monthly income when the loan is made. | Idaho Code § 28-46-412(2); Idaho Code § 28-46-413(2) |
| Illinois | Payday lenders (short-term loans) are licensed and regulated by IDFPR under the Payday Loan Reform Act (815 ILCS 122) and are subject to the 36 percent APR cap. | Payday Loan Reform Act (815 ILCS 122) |
| Indiana | On a small (payday) loan the finance charge is at most 15 percent of the first $250. | Ind. Code § 24-4.5-7-201(1) |
| Iowa | A licensee may not hold checks from one maker with an aggregate face amount of more than $500 at one time. A licensee may charge at most $15 on the first $100 of the check's face amount and at most $10 on each later $100 (prorated for part of $100). | Iowa Code § 533D.10(1)(b); Iowa Code § 533D.9(1) |
| Kansas | A Kansas payday loan (short term, single repayment) can be at most $500. A licensed or supervised lender may charge a fee of up to 15% of the cash advance on a payday loan. | Kan. Stat. Ann. § 16a-2-404(1)(c); Kan. Stat. Ann. § 16a-2-404(1) |
| Kentucky | A deferred deposit (payday) lender cannot charge a fee above $15 per $100 of the check's face amount, prorated, for a period of at least 14 days. | KRS 286.9-100(1)(b) |
| Louisiana | The amount paid to the borrower in a deferred presentment transaction (payday loan) cannot exceed $700 in the 2023 statute text; OFI adjusts the cap each year with the consumer price index. The fee on a deferred presentment transaction or small loan can be at most 16.75 percent of the check's face amount. | La. R.S. 9:3578.3(3)(c); La. R.S. 9:3578.4(A)(1) |
| Michigan | The service fee on a deferred presentment (payday) transaction is at most 15 percent of the first $100, then 14, 13, 12 and 11 percent of each further $100 (to the sixth $100). A licensee cannot make a deferred presentment transaction if the customer has an open one with that licensee or more than one open with any other licensee. | Mich. Comp. Laws § 487.2153(1)(a); Mich. Comp. Laws § 487.2153(2) |
| Mississippi | A delayed-deposit (payday) check cannot exceed $500 including fees, and a customer can have at most $500 outstanding at any time. For a check of $250 or less the fee cannot exceed $20 per $100 advanced. | Miss. Code Ann. § 75-67-519(2); Miss. Code Ann. § 75-67-519(4)(a) |
| Missouri | A payday loan (unsecured loan of $500 or less) needs a license from the Division of Finance, and the loan is capped at $500. Interest and fees on a single payday loan, with all renewals, cannot add up to more than 75 percent of the initial loan amount. | Mo. Rev. Stat. § 408.500.1; Mo. Rev. Stat. § 408.505.3 |
| Nevada | A deferred deposit loan, together with the customer's other outstanding loans, cannot exceed 25 percent of the customer's expected gross monthly income. The original term of a deferred deposit (payday) loan cannot be longer than 35 days. | Nev. Rev. Stat. 604A.5017(1); Nev. Rev. Stat. 604A.501(1) |
| North Dakota | A licensee may not disburse more than $500 to a customer in a deferred presentment service transaction. A licensee may charge a fee for deferred presentment service not to exceed 20 percent of the amount paid to the customer. | N.D.C.C. § 13-08-12(3); N.D.C.C. § 13-08-12(2) |
| Ohio | A short-term loan under the Short-Term Loan Act can be for at most $1,000. Interest on a short-term loan cannot exceed 28 percent a year. | Ohio Rev. Code § 1321.39(A); Ohio Rev. Code § 1321.40(A) |
| Oklahoma | Payday-style lending in Oklahoma is now licensed as an Oklahoma Small Lender; the OSL license replaced the old Deferred Deposit Lender license. | DOCC 2024 Annual Report |
| Oregon | A payday loan lender may not charge interest above 36 percent a year, excluding one origination fee. | ORS 725A.064(1) |
| Rhode Island | Deferred deposit transaction fees cannot exceed 10% of the amount of funds advanced. | R.I. Gen. Laws § 19-14.4-4(4) |
| South Carolina | The total a payday lender advances to a customer at one time cannot exceed $550, not counting the fee. The fee on a deferred presentment transaction can be at most 15 percent of the principal amount, charged once per written agreement. | S.C. Code Ann. § 34-39-180(B); S.C. Code Ann. § 34-39-180(E) |
| Tennessee | A deferred presentment (payday) lender can charge a fee of at most 15 percent of the check's face amount. The combined face value of all of one customer's outstanding payday checks cannot exceed $500. | Tenn. Code Ann. § 45-17-112(b); Tenn. Code Ann. § 45-17-112(o) |
| Texas | Texas treats a payday loan as a deferred presentment transaction. The definition does not exclude repayment in more than one installment. A credit access business may charge fees as agreed with the consumer, calculated daily, biweekly, monthly or on another basis. A fee cannot be charged unless it is disclosed. The statute sets no dollar or percentage limit on the fee. | Tex. Fin. Code § 393.221(2); Tex. Fin. Code § 393.602(b) |
| Utah | A lender must inquire whether the borrower can repay the loan in the ordinary course, and a first-time borrower requires a consumer report from a consumer reporting agency. | Utah Code § 7-23-401(1)(g), (6)(c) |
| Virginia | A short-term loan can be at most $2,500. A short-term lender can charge simple interest of up to 36 percent a year. | Va. Code Ann. § 6.2-1816.1(1); Va. Code Ann. § 6.2-1817(A)(1) |
| Washington | A payday (small) loan cannot be more than $700, or 30 percent of the borrower's gross monthly income if that is lower. A licensee with a small loan endorsement can charge interest and fees of up to 15 percent of the first $500 of principal. | Wash. Rev. Code § 31.45.073(2); Wash. Rev. Code § 31.45.073(5) |
| Wisconsin | Wisconsin imposes no limit on the interest or finance charge a payday lender may charge before the maturity date of a payday loan. A Wisconsin payday loan has a term of 90 days or less. | Wis. Stat. § 138.14(10)(a)1; Wis. Stat. § 138.14(1)(k) |
| Wyoming | A post-dated check casher may not charge more than 20 percent per month on the principal balance, or $30, whichever is greater. | W.S. 40-14-363(a) |
A few of these states are worth a closer look:
- Texas sets no dollar or percentage limit on the fee a credit access business charges, only that it must be disclosed. See our Texas payday loans page.
- Delaware and Wisconsin also set no cap on the finance charge before the loan is due, but they limit the loan in other ways.
- Illinois, Oregon and Virginia allow short-term loans but cap the rate at 36% a year (Oregon allows one origination fee on top, and Virginia a monthly maintenance fee).
- Ohio short-term loans can be at most $1,000 and must last at least 91 days and at most a year.
Not yet verified
We have not yet verified payday rules for Alaska, Maine and New Hampshire. Check with the state's financial regulator before you borrow there.
Rules that apply in every state
- Military borrowers. For active-duty service members and their covered dependents, the federal Military Lending Act rule says a creditor may not charge a military annual percentage rate (MAPR) above 36% (32 CFR 232.4(b)). This applies in every state.
- Online lenders. A lender's website can reach any state. Before you borrow online, check that the lender holds a license in your state. Our directory shows licensed lenders by state, and each state page links to the regulator's own license search.
What these rules mean in dollars
Many payday fees are set per $100 borrowed. Take a fee of $15 per $100 on a two-week loan. On a $300 loan that is $45, due with the $300 in 14 days. Spread over a year, $15 per $100 for 14 days works out to an APR of about 391% (our calculation: 15 × 365 ÷ 14). That is why a 36% cap usually means no payday stores. Our guide to how APR works in payday and cash advance loans shows the math, and installment loans vs. payday loans compares the two products.
Options to consider first
These are general options, not recommendations of a particular provider:
- A credit union payday alternative loan (PAL). Federal credit unions may offer PALs I of $200 to $1,000 over 1 to 6 months (after one month of membership), or PALs II of up to $2,000 over 1 to 12 months, with an application fee of at most $20 (12 CFR 701.21(c)(7)). The NCUA says the rate can be up to 28% while its 18% loan ceiling applies, which runs through September 10, 2027.
- A payment plan. Ask the landlord, utility or medical office you owe for more time.
- Local help. Call 211 or visit 211.org for local help with rent, utilities and food.
Frequently asked questions
In which states are payday loans illegal?
Georgia's own statute makes payday lending unlawful. Arizona and the District of Columbia no longer license payday lenders, and the regulators in West Virginia and Hawaii say payday loans are prohibited. Fifteen more states have rate caps under which we list no payday stores.
How many states allow payday loans?
By our verified rules, 28 states allow payday loans under a state law with its own limits. We have not yet verified Alaska, Maine and New Hampshire.
What about online payday loans in a state that bans them?
Check that a lender is licensed in your state before you share any details. State regulators list the lenders they license, and each state page in our lender directory links to that search.
What is the most a payday lender can charge?
It depends on the state. Florida caps the fee on a single-payment loan at 10% of the amount you receive. Alabama allows up to 17.5%. Texas sets no limit on a credit access business's fee as long as it is disclosed.
Do payday loan rules change?
Yes. States amend these laws, and a few have repealed theirs. Our rules show the date we last checked them, so check your state's page and the regulator before you borrow.
Sources
- State laws in the tables above: the statutes and regulator pages linked in each row, from our state rules data, last checked October 8–9, 2026.
- Consumers, West Virginia Division of Financial Institutions, checked October 11, 2026.
- Consumer FAQ, Hawaii Division of Financial Institutions, checked October 11, 2026.
- What is a payday loan?, Consumer Financial Protection Bureau, reviewed May 28, 2024.
- 32 CFR 232.4, Terms of consumer credit extended to covered borrowers, eCFR, checked October 11, 2026.
- 12 CFR 701.21, Loans to members (payday alternative loans), eCFR, checked October 11, 2026.
- Permissible Loan Interest Rate Ceiling Extended, National Credit Union Administration, February 2026.
- 211.org, United Way Worldwide, checked October 11, 2026.
We are not a lender. This is general information, not legal advice. Rules change; check your state's current rules and the lender's own disclosures before you borrow.
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