What a payday loan costs — before Vermont’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 Vermont
- Rate cap
- 24% per annum maximum on consumer loans; no licensed payday lending is permitted.
- Key law
- Vermont usury / consumer-loan statute (24% cap), enforced via the Department of Financial Regulation.
- Enforcement
- In Gingras v. Think Finance (2d Cir. 2019), the court held tribal sovereign immunity did not bar Vermont borrowers’ suit over loans at 198–376% APR, and ruled the arbitration clauses unconscionable and unenforceable.
In Gingras, Vermont borrowers were charged up to 376% against a 24% legal cap; the Second Circuit stripped the tribal lenders of immunity and voided their arbitration clauses.
What it means for a Vermont borrower
Payday and tribal online loans far exceed Vermont’s 24% cap and are void, and lenders cannot hide behind tribal immunity or forced arbitration for off-reservation loans. Most lenders exclude Vermont.
If you already have a payday loan in Vermont
A loan that violates Vermont’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.
- Complain to the Vermont Department of Financial Regulation and Attorney General.
- A loan above 24% APR is illegal and unenforceable — dispute collection.
Cheaper first — try these before a payday loan in Vermont
Payday Loans and tribal lenders in Vermont
Many online lenders that market payday loans to Vermont 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 Vermont residents and how state law applies to them, see the Vermont tribal-lending page.
Tribal loans in Vermont →Frequently asked questions
Does an online or tribal lender have to follow Vermont's payday loan rules?
Vermont 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 Vermont residents and how the state treats them, see the Vermont tribal-loan page.
What can I do about a payday loan I already have in Vermont?
Because Vermont 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.