What a payday loan costs — before Connecticut’s rules
A payday loan typically costs $15–$20 per $100 borrowed for a two-week term — roughly 400% APR — and is due as a single lump sum on your next payday. That single-payment structure, not the fee on any one loan, is the trap: most fees come from borrowers who cannot clear the balance in one go and roll it over. Where a state caps rates below payday levels, licensed payday lending disappears and a loan above the cap is generally void — not legally collectible, whatever the contract says.
The law in Connecticut
- Rate cap
- 12% APR without a license; small consumer loans above 12% require licensing, which effectively bans payday lending.
- Key law
- Connecticut small-loan and usury law (Conn. Gen. Stat. § 36a-573); Department of Banking enforcement.
- Enforcement
- The Department of Banking issued cease-and-desist orders and $1.5M in penalties against Great Plains Lending and Clear Creek Lending (Otoe-Missouria) over loans up to 448.76% APR. (A 2021 CT Supreme Court ruling later recognized Great Plains as an "arm of the tribe" for immunity purposes.)
Connecticut fined Otoe-Missouria tribal lenders and ordered them to cease loans carrying APRs up to 448.76%, with civil penalties totaling $1.5 million.
What it means for a Connecticut borrower
Loans above 12% from unlicensed lenders are illegal and treated as uncollectible, so most tribal and payday loans are effectively banned — though the arm-of-the-tribe ruling complicates direct enforcement against qualifying entities.
If you already have a payday loan in Connecticut
A loan that violates Connecticut’s ban may be partly or fully unenforceable — which changes your options with the lender and any collector. This is general information, not legal advice.
- File a complaint with the Connecticut Department of Banking.
- Loans over 12% from unlicensed lenders are illegal — dispute the debt and cite the ban.
Cheaper first — try these before a payday loan in Connecticut
Payday Loans and tribal lenders in Connecticut
Many online lenders that market payday loans to Connecticut residents are tribal lenders arguing their sovereignty places them outside state rate caps — a separate legal question this site tracks in depth. For which tribal brands lend to Connecticut residents and how state law applies to them, see the Connecticut tribal-lending page.
Tribal loans in Connecticut →Frequently asked questions
Does an online or tribal lender have to follow Connecticut's payday loan rules?
Connecticut applies its rules to loans made to its residents, wherever the lender sits. Tribal lenders argue that sovereign immunity puts them outside state rate caps — an argument courts have accepted in some cases and rejected in others. For which tribal brands lend to Connecticut residents and how the state treats them, see the Connecticut tribal-loan page.
What can I do about a payday loan I already have in Connecticut?
Because Connecticut effectively bans high-cost payday loans, a loan that exceeds the state limit may be partly or fully uncollectible — so find out before you pay a collector anything more. The steps on this page start with the lender's license. This is general information, not legal advice.