There is no federal cap on what a small consumer loan may cost, outside the Military Lending Act. Each state sets its own, and the result is three broad categories: states that permit payday lending with fee caps expressed in dollars per $100, states that cap the annual rate low enough that the product cannot operate, and states that prohibit it directly.
Written by the Loan For Any Purpose USA lending team. Reviewed by the Loan For Any Purpose Editorial Review Team. Last reviewed September 10, 2026. We explain products we do not sell as well as the ones we do.
The three categories
1. Permissive states with dollar-based fee caps
These states allow single-payment payday loans and cap the finance charge per $100 borrowed, commonly between $15 and $25. Maximum loan amounts also vary: some states cap a payday loan well below $500. A $400 loan is not permitted in California, for example, where the maximum is $255, nor in Mississippi, where it is $200, while Louisiana caps at $350. Because the term is around two weeks, these fee caps still produce triple-digit APRs.
2. States with a rate cap around 36% APR
A cap in this range makes traditional payday lending unprofitable, so lenders withdraw and the product effectively disappears even though it is not banned by name. Longer-term installment loans generally take its place.
| State | Cap | Practical effect |
|---|---|---|
| Arizona | Around 36% APR | Payday lending not viable |
| Colorado | Around 36% APR | Payday lending not viable |
| Hawaii | Around 36% APR | Payday lending not viable |
| Illinois | Around 36% APR | Payday lending not viable |
| Maryland | Around 36% APR | Payday lending not viable |
| Minnesota | Around 36% APR | Payday lending not viable |
| Montana | Around 36% APR | Payday lending not viable |
| Nebraska | Around 36% APR | Payday lending not viable |
| New Hampshire | Around 36% APR | Payday lending not viable |
| New Mexico | Around 36% APR | Payday lending not viable |
| North Carolina | Around 36% APR | Payday lending not viable |
| South Dakota | Around 36% APR | Payday lending not viable |
Several of these are recent: Nebraska's voters approved a 36% cap by ballot initiative in 2020, Illinois and Hawaii passed caps in 2021, New Mexico's took effect in 2023, and Minnesota's applied from the start of 2024.
3. States with even lower caps
| State | Cap | Practical effect |
|---|---|---|
| Arkansas | Below 36% APR | Payday lending not viable |
| Massachusetts | Below 36% APR | Payday lending not viable |
| New Jersey | Below 36% APR | Payday lending not viable |
| New York | Below 36% APR | Payday lending not viable |
| Pennsylvania | Below 36% APR | Payday lending not viable |
| Vermont | Below 36% APR | Payday lending not viable |
| District of Columbia | Below 36% APR | Payday lending not viable |
New York is the strictest of these: under state law, loans under $250,000 from non-bank lenders at more than 16% a year are civil usury, and above 25% a year they are criminal usury.
States that prohibit the product directly
- Georgia prohibits payday loans below $3,000.
- West Virginia does not permit deferred presentment loans at all.
- Connecticut bans the assignment of wages as security for a loan, which removes the mechanism payday lending relies on.
Caps on installment loans are different
A state can cap payday lending hard and still permit longer-term installment lending at triple-digit APRs, because the two products sit under different statutes. That is why our installment loans are available in states where payday loans are not. Always check the cap for the specific product, not for lending in general.
Finding the exact figure for your state
Search your state banking or financial regulation department for the consumer lending or deferred deposit rules, then cross-check at paydayloaninfo.org. For what we can offer where you live, see states we serve.
Frequently asked questions
Is there a federal cap on payday loan interest?
No general one. The Military Lending Act caps loans to covered active-duty service members and their dependents at 36% Military APR, but there is no federal cap covering consumers generally. Each state sets its own.
What is a typical payday loan fee cap?
In states that permit payday lending, caps are usually expressed as a dollar amount per $100 borrowed, commonly $15 to $25. Because the term is roughly two weeks, that still produces a triple-digit APR.
Which states cap payday loans at 36%?
States with caps at or around 36% include Arizona, Colorado, Hawaii, Illinois, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Mexico, North Carolina and South Dakota. Arkansas, Massachusetts, New Jersey, New York, Pennsylvania, Vermont and the District of Columbia cap lower still. Confirm the current position with your state regulator.
Do rate caps apply to installment loans too?
Not necessarily. Payday and installment lending sit under different statutes in most states, so a state can cap payday lending hard while still permitting longer-term installment loans at higher rates.
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