Debt consolidation loan laws by state
Most states cap the APR a licensed lender may charge on a $10,000 loan. The cap in each state, who licenses lenders there, and how to complain.
Your state sets the most a licensed finance company may charge you. The main answer does not change by state: compare APRs and fees.
The cap matters most when an offer sits near the top of a lender’s range.
What a state rate cap covers
The caps below are for a $10,000, five-year unsecured loan from a licensed lender that is not a bank (NCLC). They count fees in the APR.
A bank, or an online lender whose loans a bank makes, can often follow its home state’s rules instead. So an online offer can be legal above your state’s cap.
Federal credit unions follow their own ceiling, 18% on most loans (NCUA).
Rate caps and regulators by state
Caps from the National Consumer Law Center’s fact sheet. Regulators from the FDIC list of state agencies, with the consumer lending office named where it differs.
How to check a lender’s state license
Most non-bank lenders must be licensed in your state. Search the lender’s name on NMLS Consumer Access, or ask your state regulator in the table.
A lender with no license in your state and no bank partner should not be lending to you.
Where to complain: the CFPB and your attorney general
File a complaint with the CFPB. It sends the complaint to the company, and most companies answer within 15 days.
You can also complain to your state regulator in the table, or to your state attorney general (find yours).
Related topics
- Loan vs balance transfer
- Does it hurt your credit?
- Home equity loan or HELOC
- Debt consolidation loan calculator
Before you borrow
Is there a maximum interest rate on personal loans?
In 42 states and DC, yes, for a $10,000 loan from a licensed non-bank lender. The caps run from 17% in Arkansas to 60% in Georgia.
Which states have no cap on a $10,000 loan?
Delaware and Missouri set none. Alabama, California, Idaho, South Carolina, Utah and Wisconsin only bar unconscionable rates.
Does my state’s cap apply to online lenders?
Not always. Loans made by a bank can follow the bank’s home state rules.
Check an offer against your state’s rules
You have an offer and want to know if it is fair. The APR and the fee decide that more than the cap does. Call and a specialist reads the offer with you.