Payday loans in Vermont
Vermont prohibits payday loans because no statute permits them: 9 V.S.A. 41a holds licensed lenders to annual rates of 12 to 24%, and lending or soliciting loans with no Vermont licence counts as unfair and deceptive.
- Payday lending
- Banned
- Max cost
- None in the law
- Top amount
- None allowed
Are payday loans legal in Vermont?
No, Vermont bans payday loans through its laws on lender licensing and legal interest rates. Loans tied to a postdated payment are not permitted in Vermont. If you repay a loan in one sum, a licensed lender may not charge more than 18 percent annually. For installment loans you repay over time, the annual cap sits at 24 percent for the first $1,000, then 12 percent on amounts above that. If that figure is higher, the lender may instead charge 18 percent a year on the entire balance.
No matter where a lender operates, Vermont demands a state license for any loan you receive online, by phone, or by mail. Processing payments for or issuing an unlicensed loan is an illegal act considered unfair and deceptive. If a lender charges illegal rates, they may lose the right to collect half the principal, meaning the borrowed sum, plus all interest and charges. Before you borrow, make sure the lender holds a Vermont license.
- Licensed lenders face an 18% a year cap on single-payment loans, while the default legal rate in Vermont is 12% a year.
- From May 18, 2012, lending or soliciting loans with no Vermont licence has been an unfair and deceptive practice under 9 V.S.A. 2481w, which also reaches payment processors handling such loans.
- Under 9 V.S.A. 50(c), as the Attorney General reads it, a usurious lender may be barred from collecting half the principal and any interest or charges.
- About $1,253,282 went back to 6,740 Vermonters by August 2016 through the Attorney General's illegal lending settlements, which included deals with CashCall and Western Sky.
- According to DFR, a Vermont licence is needed for any loan made by mail, phone or electronic means to a Vermont resident. This applies no matter where the loan legally originates.
Vermont payday loan laws
- Law in force
- Vermont law: 9 V.S.A. 41a (legal interest rates), 8 V.S.A. chapter 73 (licensing lenders) and 9 V.S.A. 2481w (unlicensed loan transactions)
- Cited as
- 8 V.S.A. 2201, with 9 V.S.A. 41a and 2481w
- Fees under the law
- For single-payment loans from federal savings and loan associations or lenders under Title 8, the finance charge must stay at or below 18 percent per year.
- Installment lending limits
- One option is 18 percent APR for the whole balance. Another is 24 percent a year for the first $1,000, plus 12 percent above $1,000. For installment loans not otherwise limited, the higher cap applies (9 V.S.A. 41a(b)(5))
Also checked against ago.vermont.gov. Full statute text.
Tribal loans in Vermont
Any loan reaching a Vermont resident through the mail, by phone, or electronically needs a Vermont licence. Lending without one, or handling the payments on such loans, counts as an unfair and deceptive practice. The Attorney General has reached settlements with online lenders, among them CashCall and Western Sky.
On the immunity claim tribal lenders make, see are tribal loans legal.
None of the tribal lenders we track lists Vermont as a state it serves. Browse every tribal lender we track.
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Vermont and the states around it
| State | Payday lending | Max cost | Top amount |
|---|---|---|---|
| Vermont | Banned | None in the law | None allowed |
| Massachusetts | Banned | 23% APR | None allowed |
| New Hampshire | Banned | 36% APR | The most principal a borrower can owe one lender is $500. |
| New York | Banned | 16% APR | None allowed |
Vermont loans with no credit check
Installment loan rates: One option is 18 percent APR for the whole balance. Another is 24 percent a year for the first $1,000, plus 12 percent above $1,000. For installment loans not otherwise limited, the higher cap applies (9 V.S.A. 41a(b)(5)).
See no credit check loans: the checks lenders still run, and the price.
Verify a lender's license in Vermont
- Look the lender up on the license list before you hand over any bank details.
- Lenders here answer to the Vermont Department of Financial Regulation (DFR), Banking Division.
- Had trouble with a lender? Report the lender.
Sources for Vermont
- Unless another law says otherwise, the legal interest rate is 12% per year.; Title 8 licensed lenders may charge no more than 18% a year on single-payment loans.; Other installment loans may carry the higher of two caps: 18% APR, or a tiered rate of 24% up to $1,000 and 12% above that.legislature.vermont.gov
- It is an unfair and deceptive act to make or solicit a consumer loan without following the lender licensing chapter.; Act 136 of 2011 brought in the rules on unlicensed loan transactions; they took effect May 18, 2012, and were last amended in 2019.; Payment processors that handle payments for loans from unlicensed lenders are also covered by the law.legislature.vermont.gov
- You need a license to conduct business in loan solicitation just as you do for lending.legislature.vermont.gov
- Loans to Vermont residents via mail, phone or electronic means require a Vermont licence wherever legally made, says DFR.; Lender licence applications use NMLS, so you can check licences on NMLS Consumer Access.dfr.vermont.gov
- The Attorney General states that Vermont explicitly bans payday loans, which are loans depending on a postdated payment instrument.; A lender charging usurious rates may give up half the principal as well as all interest and charges.ago.vermont.gov
- CashCall and Western Sky are included in the Attorney General's illegal lending settlements.; About $1,253,282 went back to 6,740 Vermont consumers by August 2016 through the settlements.ago.vermont.gov
- The DFR banking complaints page accepts complaints about credit unions, banks, and licensed providers.dfr.vermont.gov