What a payday loan costs — before Minnesota’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 Minnesota
- Rate cap
- 36% APR on many consumer small/short-term loans (up to 50% for licensed lenders that run an ability-to-repay analysis), effective January 2024.
- Key law
- Minnesota consumer small-loan / usury reform, effective January 1, 2024; enforced by the Attorney General.
- Enforcement
- On November 26, 2024, AG Keith Ellison secured a consent order with LDF Holdings (Lac du Flambeau) — lenders Radiant Cash, Cash Aisle and Makwa Finance — halting Minnesota lending and discharging over $1 million in loans. A related order covered Island Mountain lending; APRs ran 200–800%.
In November 2024, Minnesota’s AG made LDF Holdings’ tribal lenders (APRs up to 800%) stop lending and forgive more than $1 million in loans to Minnesotans.
What it means for a Minnesota borrower
Loans above the 36%/50% cap violate state usury law, and the AG has forced tribal lenders to exit and forgive balances — so high-interest tribal loans are restricted and dischargeable here.
If you already have a payday loan in Minnesota
A loan that violates Minnesota’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 Minnesota Attorney General’s office.
- Loans above 36% (or 50% for qualifying licensed lenders) violate state law and may be discharged.
Cheaper first — try these before a payday loan in Minnesota
Payday Loans and tribal lenders in Minnesota
Many online lenders that market payday loans to Minnesota 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 Minnesota residents and how state law applies to them, see the Minnesota tribal-lending page.
Tribal loans in Minnesota →Frequently asked questions
Are payday loans legal in Minnesota?
In Minnesota, 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 Minnesota?
36% APR on many consumer small/short-term loans (up to 50% for licensed lenders that run an ability-to-repay analysis), effective January 2024.
What can I do about a payday loan I already have in Minnesota?
Because Minnesota restricts high-cost payday loans, a loan that exceeds the state limit may be partly or fully uncollectible. File a complaint with the Minnesota Attorney General’s office. This is general information, not legal advice.