State Annual Percentage Rate (APR) Caps For $500, $2,000 ...

State Annual Percentage Rate (APR) Caps For $500, $2,000 and $10,000 Installment Loans

MMeeddiiann SSttaateteAAPPRR* LLimimit ibtybSyizSeizoef of LLooaannIInn Sttaatteessththaat Ct CapapRaRteastes*

40% 30% 20%

36.5%

31%

25%

10%

0%

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More than three quarters of the states cap the maximum annual percentage rate (APR) on small - to mid-size installment loans. For a $500 six-month loan, 44 states and DC limit the rate; 42 states plus DC cap rates on a $2,000 two-year loan; and 38 states plus DC do so for a $10,000 five-year loan.

Voters, regardless of political party, strongly support rate caps. In the past ten years, overwhelming majorities in five states have capped rates at 36% or less: Arizona (2008), Colorado (2018), Montana (2010), Ohio (2008) and South Dakota (2016).

There is a strong historic and contemporary consensus that 36% should be the top rate for small loans. But for larger loans, 36% is a very high rate and most states impose lower caps. As the size of a loan increases, the maximum APR,* including fees, tends to decrease--from a median of 36.5% for a $500 five-year loan to 31% for a $2,000 two-year loan to 25% for a $10,000 five-year loan.

Some states have no rate cap at all. Depending on the size of the loan, 4 to 7 states only prohibit unconscionability, and 3 to 5 states have no limit.

Interest rate limits are the simplest and most effective protection against predatory lending.

$500 Six-Month Loan

Maximum APR* in States with Cap

(43 states plus DC)

NNNNCCCCAAAARRRRVVVVTTTHHHHI IIINNNNYYYYDDDDCCCCPPPAAAANNNNDDDDMMMMEEEENNNNJJJJMMMMDDDDRRRRI IIAAAAKKKKCCCCTTTIAIIAAAMMMMTTTNNNNHHHHOOOORRRRSSSSDDDDVVVAAAAWWWWYYYYCCCCOOOOMMMAAAAWWWWVVVVWWWWAAAANNNNVVVVKKKKSSSSMMMMI IICCCAAAAKKKKYYYYFFLFFLLLNNNNEEEEMMMMNNNNAAAAZZZZGGGAAAAINIIINNNSSSSCCCCLLALAAATTXTTXXXAAAALLLLTTNTTNNN-

ILIIILLLOOOOKKKKMMMMSSS-

11616%6%% 11717%7%% 22424%4%% 22525%5%% 22525%5%% 22727%7%% 22727%7%% 22828%8%% 33030%0%% 33030%0%%

3333%3%% 33535%5%% 33636%6%% 33636%6%% 33636%6%% 33636%6%% 33636%6%% 33636%6%% 33636%6%% 33636%6%% 33636%6%% 33636%6%% 33737%7%% 33838%8%% 33939%9%% 44040%0%% 44343%3%% 44343%3%% 44545%5%% 44747%7%% 44848%8%% 44848%8%%

55151%1%% 55454%4%% 66161%1%%

77171%1%% 77272%2%% 88585%5%%

99393%3%% 99494%4%% 99494%4%% 9999%9%% 11010808%8%%

Median 36.5%

33030505%5%%

No cap except unconscionability:** ID, NM, UT, WI

No cap: DE, MO, OH*

$2,000 Two-Year Loan

Maximum APR* in States with Cap

(42 states plus DC)

$10,000 Five-Year Loan

Maximum APR* in States with Cap

(38 states plus DC)

AAARRR VVVTTT MMMAAA PPAPAA CCCAAA DDDCCC NNNYYY OOOKKK RRRIII WWWAAA MMMEEE MMMDDD MMMIII NNNEEE NNNJJJ AAAKKK CCCOOO FFLFLL HHHIII MMMNNN NNNCCC WWWYYY GGGAAA KKKSSS -

O*OOHHH -

WWWVVV TTXTXX IAIIAA CCCTTT MMMTTT NNNHHH OOORRR SSDSDD VVAVAA LLALAA INIINN KKKYYY NNNVVV AAAZZZ TTNTNN MMMSSS ILIILL NNNMMM -

1177%% 2211%% 2244%% 2244%% 2255%% 2255%% 2255%%

2277%% 2299%% 2299%% 3300%% 3300%% 3300%% 3300%% 3300%% 3311%% 3311%% 3311%%

3311%% Median 31%

3311%% 3311%% 3311%% 3322%% 3322%% 3333%% 3333%% 3355%% 3366%% 3366%% 3366%% 3366%% 3366%% 3366%% 3366%%

3388%% 3399%% 3399%% 4400%% 4411%% 4411%%

5599%% 8800%% 117755%%

No cap except unconscionability*: * AL, ID, SC, UT, WI

No cap: DE, MO, ND

AARR MMEE VVTT MMAA CCOO RRI I MMNN KKSS WWYY DDCC FLFL HHI I KKYY NNEE AAKK CCTT ININ MMDD NNYY OOKK MMI I MMSS PAPA TNTN LALA NNCC WWAA WWVV AAZZ NNJJ TXTX IAIA -

ILIL MMTT NNHH OORR SSDD NNVV GGAA -

17%

18%

18%

20%

21%

21%

22%

23%

23%

24%

24%

24%

24%

24%

25%

25%

25% 25%

Median 25%

25%

25%

26%

26%

26%

26%

27%

27%

27%

27%

30%

30%

30%

32%

36%

36%

36%

36%

36%

40%

60%

No cap except unconscionability:** AL, CA, ID, NM, SC, UT, WI

No cap: DE, MO, ND, OH,* VA

*APRs are based on calculations done in 2017 for $500 loans and in 2018 for $2,000 and $10,000 loans, except that the rate for a $500 loan in Colorado reflects the 2018 voter initiative. Ohio's 2019 rates have not been calculated. The current maximum APR in some states may have changed due to changes in the law and other variables. Rates are for closed-end loans. Rates will differ for lines of credit and other open-end credit.

** Unconscionability refers to rates that are so high that they shock the conscience.

? 2019, National Consumer Law Center

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