What a payday loan costs — before Pennsylvania’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 Pennsylvania
- Rate cap
- Payday lending is effectively prohibited: the Loan Interest and Protection Act ("Act 6") sets a 6% general usury cap, and the Consumer Discount Company Act caps licensed small-loan APRs around 24%.
- Key law
- Loan Interest and Protection Act (Act 6, 6% usury) and Consumer Discount Company Act (CDCA).
- Enforcement
- In Commonwealth v. Think Finance, the AG’s 2019 settlement resolved a scheme (via Plain Green, Great Plains Lending and MobiLoans) charging up to 448% APR; Think Finance voided all outstanding loans and paid $40M. Pennsylvania has also settled with debt collectors over illegal tribal-loan collection.
The 2019 Think Finance settlement targeted a $133M scheme charging about 448% APR to nearly 80,000 Pennsylvanians — cancelling all outstanding balances and adding $40M in relief.
What it means for a Pennsylvania borrower
Payday and tribal high-cost loans made to Pennsylvania residents are illegal and unenforceable, and even collecting on them can violate state law. Borrowers may owe nothing above the 6% cap and may be eligible for restitution.
If you already have a payday loan in Pennsylvania
A loan that violates Pennsylvania’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 Pennsylvania Attorney General’s Bureau of Consumer Protection and the Department of Banking and Securities.
- Since interest above the 6% usury cap is unlawful, dispute the loan and check eligibility for settlement restitution (e.g., the Think Finance settlement).
Cheaper first — try these before a payday loan in Pennsylvania
Payday Loans and tribal lenders in Pennsylvania
Many online lenders that market payday loans to Pennsylvania 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 Pennsylvania residents and how state law applies to them, see the Pennsylvania tribal-lending page.
Tribal loans in Pennsylvania →Frequently asked questions
Are payday loans legal in Pennsylvania?
In Pennsylvania, a payday loan at typical rates is not legally viable. The state’s rate cap makes a ~400% APR loan void and not legally collectible, so licensed storefront payday lenders do not operate — and online or tribal lenders that lend anyway are on weak legal footing.
What is the maximum payday loan rate in Pennsylvania?
Payday lending is effectively prohibited: the Loan Interest and Protection Act ("Act 6") sets a 6% general usury cap, and the Consumer Discount Company Act caps licensed small-loan APRs around 24%.
What can I do about a payday loan I already have in Pennsylvania?
Because Pennsylvania effectively bans high-cost payday loans, a loan that exceeds the state limit may be partly or fully uncollectible. File a complaint with the Pennsylvania Attorney General’s Bureau of Consumer Protection and the Department of Banking and Securities. This is general information, not legal advice.