Payday loans in Connecticut
In Connecticut, payday loans are illegal: the Small Loan Lending and Related Activities Act limits small loans under $5,000 to 36% APR, and any loan violating the Act is void.
- Payday lending
- Banned
- Max cost
- 36% APR
- Top amount
- None allowed
Are payday loans legal in Connecticut?
The Connecticut Small Loan Lending and Related Activities Act makes payday loans illegal in Connecticut. A state licence is needed if you offer a loan or pay advance up to $50,000 with an annual percentage rate higher than 12%. This rate, known as the APR, covers tips, memberships, and any service fee paid by the borrower. On loans under $5,000, licensed lenders must not charge more than 36% APR, while loans from $5,000 to $50,000 cannot exceed 25% APR.
If a small loan violates this law, it is void, so no one can collect the principal, interest, or any charges. Advances on future pay, lenders working with banks, and unlicensed online lenders linked to the Otoe-Missouria Tribe all fall under this Connecticut law. You may use NMLS Consumer Access to verify if a company holds a licence in Connecticut. If an unlicensed payday lender seeks payment from you, you can submit a complaint to the Connecticut Department of Banking.
- Connecticut calculates APR using the Military Lending Act method, counting tips, memberships, and any borrower fee as finance charges.
- Any small loan violating the Act is void, prohibiting anyone from collecting principal, interest, or any charge.
- P.A. 23-126 took effect October 1, 2023, lifting the small loan ceiling to $50,000 from $15,000 and requiring licences for true lenders partnering with banks.
- Earned wage access advances generally fall under the Small Loan Act, according to the Department of Banking.
- The Banking Commissioner, in the Great Plains Lending case, ruled that two Otoe-Missouria tribal lenders did not count as tribal arms and issued a restated cease and desist order in June 2017.
Connecticut payday loan laws
- Law in force
- Connecticut Small Loan Lending and Related Activities Act
- Cited as
- Conn. Gen. Stat. 36a-555 through 36a-573
- Fees under the law
- An APR over thirty-six per cent, or over the maximum annual percentage rate allowed by the Military Lending Act if that is lower, for a small loan below five thousand dollars
- Installment lending limits
- Licences are needed for small loans of $50,000 or less if the APR exceeds 12%, with limits of 36% below $5,000 and 25% from $5,000 to $50,000 (Conn. General Statutes 36a-558(d))
Also checked against portal.ct.gov. Full statute text.
Tribal loans in Connecticut
Payday loans made by lenders without a licence count as void in Connecticut. The state has applied its small loan law to internet lenders linked with the Otoe-Missouria Tribe and found they were not tribal arms.
On the immunity claim tribal lenders make, see are tribal loans legal.
None of the tribal lenders we track lists Connecticut as a state it serves. Browse every tribal lender we track.
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Lender cases and orders in Connecticut
- 2017 ยท Connecticut Department of BankingAmerican Web Loan: The order found that neither Clear Creek Lending (a name American Web Loan uses) nor Great Plains is an arm of the tribe, and it imposed penalties and a cease and desist directive. Source
Connecticut and the states around it
| State | Payday lending | Max cost | Top amount |
|---|---|---|---|
| Connecticut | Banned | 36% APR | None allowed |
| Massachusetts | Banned | 23% APR | None allowed |
| New York | Banned | 16% APR | None allowed |
| Rhode Island | Allowed | $10.00 per $100 borrowed | $500 |
Connecticut loans with no credit check
Installment loan rates: Licences are needed for small loans of $50,000 or less if the APR exceeds 12%, with limits of 36% below $5,000 and 25% from $5,000 to $50,000 (Conn. General Statutes 36a-558(d)).
See no credit check loans: the checks lenders still run, and the price.
Verify a lender's license in Connecticut
- Look the lender up on the license list before you hand over any bank details.
- Lenders here answer to the Connecticut Department of Banking, Consumer Credit Division.
- Had trouble with a lender? Report the lender.
Sources for Connecticut
- The Military Lending Act cap or 36%, whichever is less, is the maximum APR for small loans under $5,000.; A 25% APR is the maximum for small loans ranging from $5,000 to $50,000.; Future-pay advances count too: any advance or loan of $50,000 or less is a small loan when its APR is above 12%.cga.ct.gov
- Payday loans are void and unenforceable unless issued by exempt persons or licensees, states the Department of Banking.; Licensed small loan companies may charge an APR of up to 36%.; Complaints about payday loan companies are taken by the Department of Banking, which treats them as unlicensed small loan lenders.portal.ct.gov
- NMLS Consumer Access shows the licence status of small loan companies.; Online lending and the arranging of small loans for Connecticut borrowers both fall under licensing rules.portal.ct.gov
- Since October 1, 2023, P.A. 23-126 has lifted the small loan threshold to $50,000, up from $15,000.; Under P.A. 23-126, true lenders that partner with banks need a licence.; Earned wage access products generally fall under the Small Loan Act, according to the Department.portal.ct.gov
- Tribal sovereign immunity is not a jurisdictional defense against enforcing Connecticut law, ruled the Commissioner.; Great Plains and Clear Creek were ruled not to be arms of the Otoe-Missouria Tribe by the Commissioner on remand.; June 14, 2017, was the date on the restated order.portal.ct.gov