Payday loans, which are also called “cash-advance” loans, are a small amount of money, typically $500 or less, that is lent under a high interest rate on the condition that the money, and the interest, will be repaid out of the borrower’s next paycheck. These loans can be repaid in a lump sum or over the course of several paychecks.

Are Payday Loans Legal?

Payday loans are usually legal, although there are many exceptions. Payday loan laws are complicated because they invoke several areas of law, such as:

Below is a general breakdown of state-by-state payday loan laws.

State Payday Loans Legal? Comments
Alabama Yes Max. Amount: $500

Term: 10-31 days

Alaska Yes Max. Amount: $500

Term: 14 days

Arizona No The Consumer Lenders Act prohibits these types of loans.
Arkansas No Citable as usury
California Yes Max. Amount: $300

Term: 31 days

Colorado Yes Max. Amount: $500

Term: 6 Months

Connecticut No Usury laws apply.
Delaware Yes Max. Amount: $500

Term: 60 days

Florida Yes Max. Amount: $500

Term: 7-31 days

Geogia No
Hawaii Yes Max. Amount: $600

Term: 32 days

Idaho Yes Max. Amount: $1000

Term: Not specified

Illinois Yes Max. Amount: Either $1,000 or 25% of income, whichever is smaller.

Term: 13-45 days

Indiana Yes Max. Amount: $550

Term: 14 days

Iowa Yes Max. Amount: $500

Term: 31 days

Kansas Yes Max. Amount: $500

Term: 7-30 days

Kentucky Yes Max. Amount: $500

Term: 14-60 days

Louisiana Yes Max. Amount: $350

Term: Less than 60 days

Maine Prohibited Supervised lenders only
Maryland No Consumer Loan Act applies
Massachusetts Prohibited Small Loan Act applies; licensed lenders may provide small loans
Michigan Yes Max. Amount: $600

Term: 31 days

Minnesota Yes Max. Amount: $350

Term: 30 days

Mississippi Yes Max. Amount: $500

Term: 28 – 30 days

Missouri Yes Max. Amount: $500

Term: 14-31 days

Montana Yes Max. Amount: $300

Term: 31 days

Nebraska Yes Max. Amount: $500

Term: 34 days

Nevada Yes Max. Amount: 25% of expected gross income

Term: 35 days, up to 90 if initial agreement provides for installment payments and no extensions.

New Hampshire Yes Max. Amount: $500

Term: 7-30 days

New Jersey No Usury laws may apply.
New Mexico Yes Max. Amount: $2500

Term: 14 to 35 days; shorter time may be agreed to.

New York No
North Carolina No After 2001, Consumer Finance Act applies
North Dakota Yes Max. Amount: $500

Term: 60 days

Ohio Yes Max. Amount: $500

Term: 31 days

Oklahoma Yes Max. Amount: $500

Term: 12-45 days

Oregon Yes Max. Amount: Unspecified

Term: At least 31 days

Pennsylvania No
Rhode Island Yes Max. Amount: $500

Term: At least 31 days

South Carolina Yes Max. Amount: $550

Term: 31 days

South Dakota Yes Max. Amount: $500

Term: Unspecified

Tennessee Yes Max. Amount: $425

Term: 31 days

Texas Yes Max. Amount: Unspecified

Term: 7-31 days

Utah Yes Max. Amount: Any amount

Term: Up to 10 weeks

Vermont No
Virginia Yes Max. Amount: $500

Term: At least 2 pay periods

Washington Yes Max. Amount: $700, or 30% of gross income, whichever is less

Term: Up to 45 days

West Virginia No Small loan act
Wisconsin Yes Max. Amount: $1500 or 35% of income, whichever is less

Term: 90 days or less

Wyoming Yes Max. Amount: Unspecified

Term: 1 month

Seeking Legal Advice

The laws surrounding payday loans can be complicated and they vary significantly from state to state. The chart above merely breaches the surface of a large, complex system of consumer lending. If you have a payday loan or are considering taking one in order to make ends meet, you should strongly consider contacting an attorney before taking any steps in the process. A bankruptcy attorney should be able to explain to you the laws of your state and advise what course of action is best for you.