What a payday loan costs — before Montana’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 Montana
- Rate cap
- 36% APR on consumer, payday and title loans under Initiative I-164 (2010), which replaced a prior ~400% regime.
- Key law
- Montana Loan Interest Rate Limit, Initiative I-164 (2010), passed by ~72% of voters.
- Enforcement
- Ongoing Fort Belknap "rent-a-tribe" litigation (2023) probes whether Island Mountain Development Group lenders are true arms of the tribe. No completed state AG judgment verified.
Montana is the home base of Fort Belknap’s Island Mountain lenders (which grew ~72%/yr from 2013–2020), yet those lenders refuse to lend to Montana residents.
What it means for a Montana borrower
A non-tribal loan above 36% is void and uncollectable, so storefront payday lending effectively ended. Tribal lenders claim exemption via sovereignty, but several based in Montana — Bright Lending, Target Cash Now, Cash Advance Now — actually exclude Montana borrowers.
If you already have a payday loan in Montana
A loan that violates Montana’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 Montana Division of Banking and Financial Institutions.
- A non-tribal loan over 36% is unenforceable — treat collection demands as challengeable.
Cheaper first — try these before a payday loan in Montana
Payday Loans and tribal lenders in Montana
Many online lenders that market payday loans to Montana 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 Montana residents and how state law applies to them, see the Montana tribal-lending page.
Tribal loans in Montana →Frequently asked questions
Does an online or tribal lender have to follow Montana's payday loan rules?
Montana 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 Montana residents and how the state treats them, see the Montana tribal-loan page.
What can I do about a payday loan I already have in Montana?
Because Montana restricts 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.