Payday loan caps by state: what each rule does to the price
State law is the whole price tag in this market, and it sorts into four tiers: roughly a third of states plus DC permit no storefront payday lending at all (rate caps near 36% APR make the product impossible); a second group caps loans at $300–$350 — California’s famous $300 gross/$255 net rule lives here; a third caps at $500 with fee formulas around 10–15% of the check; and the remainder either set high caps or no dollar cap at all, where online lenders price freely and APRs run into the hundreds. The table below is computed from our 51-jurisdiction dataset, so it moves when legislatures do.
The four tiers, computed from the dataset
This is the same data core that powers every state page on the site — caps, fee formulas, statutes and regulators are taken from regulator sources and re-derived on each build, so a legislature’s vote changes this table without anyone touching the prose.
| Tier | Jurisdictions | Examples | Cost shape on a typical loan |
|---|---|---|---|
| Banned / rate-capped | 13 jurisdictions | Arizona, Arkansas, Connecticut, District of Columbia… | No licensed product; online and tribal routes fill the gap |
| $300-class caps | 3 jurisdictions | California, Louisiana, Minnesota | Flat fee $45–$52 on the max loan; California nets $255 |
| $500-class caps | 20 jurisdictions | Alabama, Alaska, Colorado, Florida… | Flat fee $50–$90; single repayment on payday |
| High-cap / uncapped | 15 jurisdictions | Delaware, Hawaii, Idaho, Illinois… | Online and storefront pricing set the rate; APRs 400%+ common |
Why the $300 tier exists
The $300 cap is consumer arithmetic: at a $45 maximum fee, a maximum loan repaid on a $400 weekly take-home check takes about 11% of it — the largest single payment most household budgets absorb without cascading. California’s version prices the fee off the face value and hands the borrower the net, which is why “$255 payday loans” is its own search market: the cap is $300, the cash is $255, and honest lenders advertise the number you actually hold.
What the uncapped tier really prices
Where no dollar cap binds, storefronts and online lenders price by contract, and the market rate settles near what enforcement tolerance allows — our worked state examples land at $20 per $100 per term, and online APRs in the 400%–600% band are routine. These are also the states where the cap-free alternatives matter most: PALs at the 28% ceiling, app advances, and the comparison discipline of reading total of payments before signing anything.
Your state’s exact numbers
Every state guide on this site lists the cap, the fee formula, the term, the rollover rule and the regulator — with a worked example at the state’s typical loan size. The regulator link doubles as the license-lookup tool for any lender you are checking.
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FAQ
How many states ban payday lending?
Around twenty states plus DC permit no storefront payday lending — their rate caps (typically 16–36% APR) sit below what two-week, small-dollar pricing needs to survive. Residents use online installment routes, app advances, PALs, and tribal products where legal disputes allow.
Why is California’s payday loan called a $255 loan?
California caps the gross loan at $300 and allows a fee up to about 17.65% of face value, taken off the top — so a maximum loan delivers $255 in cash. Lenders market the net amount, which is why “$255 payday loans online” is its own search market.
Do city or county rules change payday pricing?
Pricing is set at the state level — a city cannot raise or lower the statutory cap, which is why every licensed storefront in a state charges the same capped fee. Local zoning rules affect where stores operate, not what they charge.
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