How to Compare Loans in Massachusetts
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Are Payday Lending Legal in Massachusetts?
Payday loans are prohibited in Massachusetts. Although technically, lenders may provide loans in the state but they have to be properly licensed and need to adhere to the 23% APR small loan cap.
Employee unions and labor laws are taken very seriously by the state’s authorities; to help combat the need for short-term payday loans, it is compulsory for employers to pay employees weekly or after a fortnight.
This ensures people don’t have to endure long periods of time without cash and rush to payday lending.
The Advantages of Online Massachusetts Loans
Massachusetts Payday Loans Laws
Payday lending is not specifically prohibited in Massachusetts although must meet strict statutory licensing provisions. Examine the current legal standing of payday lending in Massachusetts and why they are under close scrutiny by the government.
The division of banks requires that any business engaged in providing loans to obtain a license under the Massachusetts General Laws. A business engaged in offering loans of $6,000 or less is required to obtain a Small Loan Company License.
As long as lenders act in accordance with the Small Loans Act, they are allowed to run the business. This also applies to other online lending companies in the state. Such measures were taken with an aim to protect consumers from unscrupulous lenders.
There are various laws governing the function of small loan providers in the state of Massachusetts. A rate cap applies, prohibiting a lender from charging more than 23% interest plus $20 in administrative fees on small loans.
The essential Massachusetts payday loans laws read the following:
- Payday lending is generally considered illegal in the entire state
- Any similar lending business are restricted in their operation
- Banks and out-of-state payday companies are prohibited from cooperating
- The state monitors and controls fees and charges
- Lenders are not allowed to charge more than 23% of the loan
Massachusetts Payday Loan Regulations
| Legal Status | Prohibited |
| Interest Rate (APR) | 23% small loan cap |
Legal Application Process for Lenders
Each applicant must submit an application with the division and demonstrate that the business has a net worth of more than $75,000. The applicants must provide financial statements of the previous year, edited by a certified public accountant.
Other information required may include:
- Character and fitness certificate
- Educational background
- Background of management of employees
- Business experience letters
Small loan providers who have been authorized to do business must keep a record of all the accounts and information. Any other significant events such as bankruptcy should be well communicated by the licensee to the commission.
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An online personal loan can help when you need cash for large purchases or unplanned expenses.
Why Compare Personal Loans at Financer.com
Compare Massachusetts Loans at Financer.com
Financer.com helps you compare the best personal loans in Massachusetts and get the best loan rates from leading lenders.
We look for lenders that offer full transparency and have a long track record of successful lending and satisfied customers. We are always improving our comparisons, but are confident in what we can bring to market, and we know you will be as well.
Use our free loan comparison tool to find the right personal loan in Massachusetts and take the guesswork out of doing all the legwork yourself.
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Massachusetts Loans - FAQs
Are payday loans legal in Massachusetts?
How can I get a payday loan in Massachusetts?
The Division of Banks of Massachusetts states that there are no prohibitions for payday lending in Massachusetts though exceedingly high APRs are illegal. Thus, presently, all lenders willing to offer small-dollar loans in the state are required to be properly licensed and have to adhere to a 23% APR small loan cap.
What fees may lenders charge on a Massachusetts loan?
Lenders can charge a maximum of 23% of the loan and they cannot charge more than $20 as an administrative fee or any finance charge whatsoever.
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