What a payday loan costs — before Michigan’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 Michigan
- Rate cap
- Payday ("deferred presentment") loans cap loan size at $600 with tiered fees (2005 Act). The general usury cap is 7%; charging over 25% is criminal usury (MCL 438.41).
- Key law
- Deferred Presentment Service Transactions Act, 2005; Michigan Criminal Usury Act (MCL 438.41).
- Enforcement
- In October 2019, Michigan AG Dana Nessel sued an online tribal lender for allegedly charging Michigan borrowers over 300% interest and engaging in unfair and deceptive practices.
In 2019, Michigan AG Nessel filed suit to stop an online lender charging more than 300% interest — well above Michigan’s 25% criminal-usury threshold.
What it means for a Michigan borrower
Licensed payday loans are legal but capped in size and fees. Loans over 25% APR from unlicensed or tribal lenders may be criminally usurious and unenforceable — and the AG has actively litigated against tribal online lenders.
If you already have a payday loan in Michigan
A loan that violates Michigan’s rate limits 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 Michigan Department of Insurance and Financial Services (DIFS) and the Michigan Attorney General.
- Since rates above 25% can be criminal usury, treat an unlicensed high-rate tribal loan as likely void and dispute the interest.
Cheaper first — try these before a payday loan in Michigan
Payday Loans and tribal lenders in Michigan
Many online lenders that market payday loans to Michigan 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 Michigan residents and how state law applies to them, see the Michigan tribal-lending page.
Tribal loans in Michigan →Frequently asked questions
Are payday loans legal in Michigan?
In Michigan, payday loans are legal but tightly limited. The state caps loan size, fees or rollovers, so a legal payday loan looks different — and costs less — than the ~400% APR norm, and any lender exceeding those limits is out of compliance.
What is the maximum payday loan rate in Michigan?
Payday ("deferred presentment") loans cap loan size at $600 with tiered fees (2005 Act). The general usury cap is 7%; charging over 25% is criminal usury (MCL 438.41).
What can I do about a payday loan I already have in Michigan?
Because Michigan restricts high-cost payday loans, a loan that exceeds the state limit may be partly or fully uncollectible. File a complaint with the Michigan Department of Insurance and Financial Services (DIFS) and the Michigan Attorney General. This is general information, not legal advice.