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
Are payday loans legal in Vermont?
In Vermont, 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 Vermont?
24% per annum maximum on consumer loans; no licensed payday lending is permitted.
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. Complain to the Vermont Department of Financial Regulation and Attorney General. This is general information, not legal advice.