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Montana · checked October 24, 2026

Payday loans in Montana: the rules and your way out

Typical payday loans not allowed

Montana's Deferred Deposit Loan Act is still on the books, but since the 2010 voter initiative (I-164) a lender may not charge more than 36% per year, which makes the typical high-fee payday loan unlawful.

Law: Montana Deferred Deposit Loan Act, MCA 31-1-701 to 31-1-729 (esp. 31-1-715, 31-1-722, 31-1-723, 31-1-724). Montana Code Annotated 2025 (as published on mca.legmt.gov, read 2026-10-24)

Montana's rules, line by line

Largest loan
$300, exclusive of the permitted fee (minimum loan $50). MCA 31-1-715(2)-(3).
Longest term
31 days. MCA 31-1-715(1).
Fee or rate cap
"A licensee may not charge a fee for making or carrying each deferred deposit loan authorized by this part that exceeds 36% per annum, exclusive of the insufficient funds fees" (MCA 31-1-722(2), as amended by I.M. No. 164, approved Nov. 2, 2010). No other interest, fees or charges allowed (31-1-722(1)).
Renewals and rollovers
Prohibited. "Deferred deposit loans may not be renewed or extended" (31-1-715(10)); renewing, rolling over, refinancing or consolidating with proceeds of another deferred deposit loan is prohibited, though a licensee may extend the due date without charge (31-1-723(6), (13), (15)).
Waiting period between loans
No waiting period stated; a new loan may be made once the prior loan transaction is completed (paid in full / debited). MCA 31-1-715(10).
Loans at once
One. A licensee may not enter into a deferred deposit loan with a consumer who has an outstanding deferred deposit loan (31-1-723(14)). A loan exceeding 25% of the consumer's monthly net income is a factor in finding it unconscionable (31-1-723(8)).
Payment plan if you cannot pay
No statutory extended payment plan. The lender may, without charge, extend the term of the loan beyond the due date (31-1-723(15)), but is not required to.
State loan database
No. The Act requires the department to maintain a public list of licensees (31-1-713(1)) but creates no real-time loan database.
Limits on collection
One returned-check or failed-electronic-debit fee of no more than $30 per check/loan, which is the lender's exclusive late charge; no bad-check statutory damages under 27-1-717(3) (31-1-722(3)-(4)). Lender may not threaten or use criminal process, or civil process not generally available to creditors, to collect (31-1-723(2)). No collateral (31-1-723(16)). Reasonable attorney fees and costs only if the loan agreement provides and only to the prevailing party (31-1-722(5)).
Other rights
Right to rescind by 5 p.m. of the licensee's next business day by returning 100% of the amount loaned, with no fee or interest (31-1-715(5)). Loan agreement may not contain a hold-harmless clause, confession of judgment, jury-trial waiver, wage assignment, or waiver of claims/defenses (31-1-723(20)). Intentional violations: actual and consequential damages plus $1,000 statutory damages per violation, costs and attorney fees; class actions allowed (31-1-724).

If you are behind on a payday loan in Montana

  1. Check whether the loan was legal to make. Montana does not allow payday loans at typical payday prices. If a lender charged more than the state's limit, report it to the Montana Department of Administration, Division of Banking and Financial Institutions 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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