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Compare your loan options in Massachusetts
The law prohibits payday lending, but you may still be able to borrow a small loan.
Updated
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When you have unplanned expenses and are on a tight budget, a payday loan could be helpful. Payday loans, a type of short-term loan, give you quick access to money when you need it. Read on to find out about the laws in Massachusetts and everything else you should know about how payday advances work.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
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Massachusetts has placed a strict cap on APR, which means you won’t be able to find a payday lender in the state. But if you’re facing a tough financial situation, there are other short- and long-term options for you to consider.
Are payday loans legal in Massachusetts?
No. While payday lending itself isn’t illegal, the high APR lenders charge is — which means payday lenders don’t operate in the state. This is because of Massachusetts’ Small Loan Act, 209 Mass. Code Regs. 45:14(8). It caps interest at 23% and administrative fees at $20 for loans under $6,000. This applies to out-of-state lenders as well, so online loans are also effectively banned.
What other options do I have if I need extra money in Massachusetts
If you’re facing long-term financial issues, these public assistance programs may help you while you work to tackle your debt:
- MassHealth
- Prescription Drug Assistance
- Supplemental Nutrition Assistance Program (SNAP)
- Women, Infants, & Children (WIC)
- Economic Assistance
- Employment Services Program (ESP)
- Rental assistance programs
- Fuel Assistance
- Transitional Aid to Families with Dependent Children (TAFDC)
- Emergency Housing Assistance Program
Are there any other short-term options in Massachusetts?
While getting a payday loan in Massachusetts isn’t possible, there are other short-term loan options, including these payday loan alternatives:
- Negotiate with you creditors. If you’re struggling to meet a due date or can’t make a full payment, consider negotiating with your creditor for better terms. This is one of the best ways to pay down your debt.
- Take out a credit card cash advance. If you already have a credit card that hasn’t been maxed, you can borrow an advance on the remaining line of credit. This comes with a high APR, but it’s a longer term than payday loans and can be a quick way to make it through a rough patch.
- Ask for help from friends or family. A friend or family member may be willing to help you pay for an unexpected bill or car repair, usually without charging interest Just be sure to pay back what you owe when you can, or it could strain your relationship.
Bottom line
Payday loans aren’t available in Massachusetts, but there are other short-term options like installment loans that could help when you’re facing a crisis. Just be sure to consider your alternative options and confirm the lender is licensed before you agree to a loan.
Frequently asked questions
No. Payday lenders from other states are prohibited from offering payday loans to residents of Massachusetts.
The high APR these loans come with and the high fees borrowers have to pay are some of the reasons why payday loans are illegal.
You can file a complaint with the Massachusetts Division of Banks.
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Elizabeth Barry is Finder's global fintech editor. She has written about finance for over six years and has been featured in a range of publications and media including Seven News, the ABC, Mamamia, Dynamic Business and Financy. Elizabeth has a Bachelor of Communications and a Master of Creative Writing from the University of Technology Sydney. In 2017, she received the Highly Commended award for Best New Journalist at the IT Journalism Awards. Elizabeth's passion is writing about innovations in financial services (which has surprised her more than anyone else).
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