Massachusetts Payday & Small-Dollar Loan Laws
Payday loans prohibited
Massachusetts's 23% APR small-loan cap prohibits traditional payday lending. The state has aggressively pursued unlicensed lenders.
Massachusetts Lending Overview
Massachusetts state laws maintain a strict regulatory environment for small-dollar credit by capping interest rates on loans of $6,000 or less at 23% APR. An additional administrative fee of up to $20 is permitted, but the overarching interest ceiling effectively prohibits traditional payday lending within the state. Because there is no legal framework for high-interest, short-term balloon payments, state authorities aggressively pursue unlicensed out-of-state or online entities attempting to bypass these consumer protections.
Residents seeking immediate capital typically utilize licensed installment loans or personal loans that adhere to the state's interest limits. These financial products provide a structured repayment schedule rather than the single-payment model found in other regions. Borrowers often use these regulated options for emergency expenses or debt consolidation. While payday loans are unavailable, the existing small-loan statutes ensure that available credit products remain within the established 23% rate cap.
Maximum loan amount
N/A
Maximum loan term
N/A
Maximum APR / finance charge
23% APR + $20 admin fee
Rollover / renewal rule
N/A
Cooling-off period
N/A
Governing statute
Mass. Gen. Laws ch. 140 § 96
Who regulates lenders in Massachusetts
Massachusetts Division of Banks
https://www.mass.gov/orgs/division-of-banks
File a complaint with the regulator above if a lender violates state law. You can also file with the CFPB.
Massachusetts loan options
Other state loan laws
Reviewed by Darnell Pierce, MBA. Last reviewed January 2026. This page is informational, not legal advice — verify current rules with the state regulator before borrowing.