What a payday loan costs — before Iowa’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 Iowa
- Rate cap
- No 36% cap. Delayed-deposit loans are capped at $500 with fixed fees ($15 for loans up to $500), yielding a maximum ~366% APR.
- Key law
- Iowa Delayed Deposit Services Licensing Act (Iowa Code § 533D), regulated by the Division of Banking.
- Enforcement
- No major tribal-specific state action verified; a 2019 push for a 36% cap failed.
Iowa’s maximum allowable payday APR is 366%, and repeated attempts to impose a 36% cap have died in the Legislature.
What it means for a Iowa borrower
Licensed payday loans are legal up to ~366% APR, while tribal loans sit in a separate jurisdictional gray zone. Non-tribal loans exceeding statutory fees are challengeable.
Before you borrow in Iowa
- File a complaint with the Iowa Division of Banking.
- Verify whether the online lender is state-licensed — unlicensed loans may be contestable.
Cheaper first — try these before a payday loan in Iowa
Payday Loans and tribal lenders in Iowa
Many online lenders that market payday loans to Iowa 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 Iowa residents and how state law applies to them, see the Iowa tribal-lending page.
Tribal loans in Iowa →Frequently asked questions
Does an online or tribal lender have to follow Iowa's payday loan rules?
Iowa 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 Iowa residents and how the state treats them, see the Iowa tribal-loan page.
What can I do about a payday loan I already have in Iowa?
Iowa allows this lending, so the loan is generally enforceable — but you can still revoke ACH authorization in writing, avoid taking a second loan to cover the first, and file a complaint with the Iowa attorney general or the CFPB if the lender breaks the rules.