State lending rules
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.
Maximum loan amount
N/A
Maximum term
N/A
APR / finance charge
23% APR + $20 admin fee
Rollover rule
N/A
Cooling-off period
N/A
Statute
Mass. Gen. Laws ch. 140 § 96
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.
What the law means for borrowers
Massachusetts's rules affect whether payday loans are available, how much a borrower may be able to receive, how long repayment can last, and what finance charges may apply. Even where payday lending is legal, the total repayment amount can be substantially higher than the amount borrowed.
Before accepting a loan offer
- Confirm the lender is licensed or otherwise authorized to operate in Massachusetts.
- Compare APR, fees, payment schedule, and total repayment amount.
- Check whether rollovers, renewals, or refinancing are allowed or restricted.
- Consider lower-cost alternatives such as credit-union small-dollar loans, payment plans, employer advances, or local assistance programs.
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.
Loan options in Massachusetts
Compare state-specific loan pages before applying. Product availability depends on state law, lender licensing, underwriting, and your financial profile.
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Also useful: APR calculator · Compare loan types · State loan laws
Other state loan laws
Reviewed by Darnell Pierce, MBA. Last reviewed January 2026. This page is informational and is not legal advice. Verify current rules with the state regulator before borrowing.