Payday loans are currently legalized in 37 states and are illegal in 13 states. The largest and most in-demand payday loan states are Texas, Nevada, and California. Four other states have established some limits on interest rates on payday loans. Among such states are Montana, New Hampshire, California, South Dakota. Payday loans are a way for Americans to get cash immediately when needed before payday. They can be quite necessary in a financial emergency. Yet lenders have been criticized for being unfair to payday borrowers. In some states, payday loans and similar types of loans are completely forbidden.
Thirty-seven states allow payday loans under specific laws including Alabama, Colorado, California, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Ohio, Tennessee, Texas.
The illegal States that currently completely forbid payday loans include Vermont, New Jersey, Arizona, Connecticut, Georgia, Arkansas, Maryland, New Jersey, New York, Massachusetts, and North Carolina, Columbia.
High-value payday loans are permitted by state law or regulation in thirty-two states. Borrowers are protected from costly payday loans through reasonable limits on low loan rates or other prohibitions in fifteen states. Three other states in the United States have lower ceiling rates or longer terms for less expensive loans. Payday lenders online usually obey state licensing laws and rate caps of the state in which the borrower obtains the loan.