Payday loans come with a variety of terms, just as any other loan. It is important to know and understand these terms and conditions before considering this as an option for you and your family.
1. Pre-approval/Approval. Being approved for a payday loan is not difficult. Each state sets forth a different set of requirements. For most, all that is required is a copy of a recent bank statement and a copy of a recent pay stub.
2. Term. Payday loan terms are extremely short. In most cases, the average payday loan term is two weeks. Payday loans are not meant to provide excess items. Rather, they are set up to provide a way to meet financial obligations until one’s next payday.
3. Interest. Payday loans usually cost 400% of APR. In certain cases, this interest rate could be more. The highest interest rate currently inforce is 780%. Shorter term loans require higher interest rates.
4. Amounts. Payday loan amounts range from $100 to $1000. States can put a cap on the maximum amount of a payday loan allowed.
The Payday Loan Organization provides a table that shows each states’ fees/interest caps, loopholes (if any) and the APR based on each $250 amount.
| State | Fee/interest cap | APR for $250 | Loophole |
|---|---|---|---|
| Alabama | 17.5% of loan | 456% | |
| Alaska | $15 per $100 +$5 | 443% | |
| Arizona | 15% of check | 460% | |
| California | 15% of check | 460% | |
| Colorado | 20% 1st $3007.5% >$300 | 521% | |
| Deleware | No Cap | No Cap | |
| Florida | 10% of loan +up to $5 verification fee | 342% | |
| Hawaii | 15% of check | 460% | |
| Idaho | No Cap | No Cap | |
| Illinois | $15.50/$100 | 404% | Loans over 120 days: No Cap |
| Indiana | 15% 1st $25013% $251 to $400
10% $401 – $550 |
391% | |
| Iowa | $15 1st $100$10/$100 thereafter | 358% | |
| Kansas | 15% of loan | 391% | |
| Kentucky | 15% of check | C460% | |
| Louisiana | 16.75% of checkUp to $45 + $5 doc fee | 521% | |
| Michigan | 15% 1st $10014% $101-$200, 13% $201-$300, 12% $301-$400, 11% $400-$600 + fee | 375% | |
| Minnesota | 7% of loan +$5 fee | 235% | Industrial Loans: No Cap |
| Mississippi | 18% of check | 572% | |
| Missouri | Max 75% of loans | 1,955% | |
| Montana | 25% of loan | 652% | |
| Nebraska | $15 per $100 ck | 460% | |
| Nevada | No Cap | No Cap | |
| New Mexico | $15.50/$100 +$0.50 per $100 fee | 409% | Installment Loans:No Cap |
| North Dakota | 20% + fee | 520% | |
| Oklahoma | $15/$100 1st $300$10/$100 for $301-$500+fee | 396% | |
| Rhode Island | 15% of loan | 390% | |
| South Carolina | 15% of check | 460% | |
| South Dakota | No Cap | No Cap | |
| Tennessee | Lesser 15% of ckOr $30 max. | 313% | |
| Texas | $10 + 48% annually | 156% | Credit Services Org.: No Cap |
| Utah | No Cap | No Cap | |
| Virginia | 20% of loan +36%Annual interest + $5 | 610% | Open end line/No CapWith car title as security |
| Washington | 15% 1st $500,10% if $500 to $700 | 390% | |
| Wisconsin | No Cap | No Cap | |
| Wyoming | 20%/mon. or $30 fee | 313% |
In short, each state has the jurisdiction to set its own payday terms and conditions. Individual companies can decide upon terms and conditions, as long as they correspond with the states’ regulations.
(The above table was copied from and can be found at Paydayloaninfo.org)
Jason Blackburn is a payday loans expert with particular knowledge of no fax loans, cash advance loans, and quick loans.
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