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Maryland · checked October 24, 2026

Payday loans in Maryland: the rules and your way out

Typical payday loans not allowed

Maryland caps consumer loan interest at 2.75% a month (33% a year) on small loans, and any loan of $25,000 or less made above the legal rate or by an unlicensed lender is void and unenforceable, so payday loans are not lawful.

Law: Md. Code Ann., Com. Law 12-306 and 12-314 (Maryland Consumer Loan Law); Fin. Inst. Title 11, Subtitle 2 (licensing). Current statute text on mgaleg.maryland.gov as read 2026-10-24.

Maryland's rules, line by line

Fee or rate cap
For loans made on or after July 1, 1982 with an original principal of $2,000 or less: 2.75% per month on the part of the unpaid principal up to $1,000 and 2% per month on the part above $1,000. Above $2,000: 2% per month (Md. Code, Com. Law 12-306(a)(6)). OFR states this as 33% per year on the first $1,000 and 24% per year after that.
Limits on collection
A loan of $25,000 or less is void and unenforceable if it carries a rate or charge above what state law allows, violates the federal Military Lending Act, or was made by an unlicensed, non-exempt lender. No one may receive or retain any principal, interest, fees or other compensation on such a loan, collect or try to collect any amount from the borrower, enforce it against property, or sell or assign it (Com. Law 12-314(b), (d)). A clerical error corrected before the first payment is excepted.
Other rights
Loans made by out-of-state lenders to Maryland residents are covered if the application originated in Maryland (12-314(c)(3)). Most consumer lenders must be licensed by the Commissioner of Financial Regulation.

If you are behind on a payday loan in Maryland

  1. Check whether the loan was legal to make. Maryland does not allow payday loans at typical payday prices. If a lender charged more than the state's limit, report it to the Maryland Office of Financial Regulation (Commissioner of Financial Regulation), Maryland Department of Labor through its complaint page.
  2. Stop the automatic withdrawals if they are emptying your account. You can revoke the lender's permission to debit your account and tell your bank. How to do it.
  3. Look at a credit union payday alternative loan. Federal credit unions can lend $200 to $2,000 at much lower cost. How they work.
  4. Talk to a nonprofit credit counselor. A counselor can look at all your bills, not just this one. How to find a real one.

Check a lender, or report one

Sources

This page summarizes the law; it is not legal advice. Laws change, and the statute and regulator control. If something here is out of date, write to hello@paydayloan.help.

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