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Minnesota · checked October 24, 2026

Payday loans in Minnesota: the rules and your way out

Typical payday loans not allowed

Minnesota still authorizes consumer small loans (up to $350, single payment, 30 days) and short-term loans (up to $1,300), but since the 2023 law the all-in APR is capped at 50%, with an ability-to-repay test above 36%, so traditional high-fee payday loans are unlawful.

Law: Minn. Stat. 47.60 (consumer small loans), 47.601 (consumer short-term loans), 47.603 (ability to repay); Laws 2023, ch. 57, art. 3; Laws 2026, ch. 124, art. 1, s. 5. 2025 Minnesota Statutes as displayed by the Revisor, plus Laws 2026, ch. 124, art. 1, s. 5 (amends 47.60, subd. 1). The 50% cap and ability-to-repay rules come from Laws 2023, ch. 57, art. 3.

Minnesota's rules, line by line

Largest loan
$350 for a consumer small loan (single installment) (Minn. Stat. 47.60, subd. 1(a)), with total principal outstanding no more than $350 (subd. 2(f)). $1,300 for a consumer short-term loan (47.601, subd. 1(e)).
Longest term
30 calendar days for a consumer small loan (Minn. Stat. 47.60, subd. 2(b)).
Fee or rate cap
An annual percentage rate of up to 50%, and 'No other charges or payments are permitted.' The APR includes all interest, finance charges and fees (Minn. Stat. 47.60, subd. 1(c), 2(a); 47.601, subd. 2(e)). After maturity, no more than 2.75% per month (47.60, subd. 2(c)). Any loan above 36% APR requires an ability-to-repay analysis (47.603).
Renewals and rollovers
A small loan may not be repaid with the proceeds of another loan from the same lender or a related interest, and loans may not be split to raise charges (Minn. Stat. 47.60, subd. 2(f)).
Loans at once
Small loans: no single borrower may have more than one loan outstanding if that results in a higher charge, or more than $350 in total principal at once (Minn. Stat. 47.60, subd. 2(f)).
Limits on collection
A return check charge as authorized by Minn. Stat. 604.113, subd. 2(a); the civil penalty under 604.113, subd. 2(b) may not be demanded (47.60, subd. 2(e)). Short-term lenders may not use the prohibited debt collection practices of 332.37 (47.601, subd. 3). A loan is void, and the borrower is not obligated to pay any amount, if it was made by an unlicensed lender, violates 47.601 subd. 2 or 3, or exceeds the interest, fees, charges or loan amounts allowed by 47.60, subd. 2 (47.601, subd. 6(b)).
Other rights
Private right of action: all money collected, actual damages, statutory damages of up to $1,000 per violation, attorney fees and an injunction (Minn. Stat. 47.601, subd. 6(a)). Ability-to-repay analysis for any loan above 36% APR (47.603). Contracts may not choose another state's law or forum or bar class actions (47.601, subd. 2(a)). Anti-evasion and true-lender rules (47.60, subd. 8; 47.601, subd. 5a). The 2026 law (ch. 124, art. 1, s. 5) extends 'lender' to anyone 'arranging' small loans.

If you are behind on a payday loan in Minnesota

  1. Check whether the loan was legal to make. Minnesota does not allow payday loans at typical payday prices. If a lender charged more than the state's limit, report it to the Minnesota Department of Commerce 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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