How short-term loans work in the Bay State.
Our top pick: CashUSA Installment Loans
- Bad credit is OK
- No application fee
- Debt education resources
Our top pick: CashUSA Installment Loans
- Min. Credit Score Required: Bad credit OK
- Min. Loan Amount: $500
- Max. Loan Amount: $10,000
- APR: 5.99% to 35.99%
- Requirements: $1,000+ monthly income after taxes, valid checking account
Are payday loans legal in Massachusetts?
No. Payday loans are illegal in Massachusetts under the Small Loan Act, 209 Mass. Code Regs. 45:14(8). They are not officially banned, but the Small Loan Act caps interest at 23% and administrative fees at $20. This applies to out-of-state lenders as well, meaning online loans are also banned.
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Although payday loans are prohibited in Massachusetts, you may find an installment loan lender that operates in your state.
Benefits of an installment loan
- Longer repayment period. Installment loans are typically paid back over a period of months as opposed to payday loans which are typically paid back on your next payday or within a few days to weeks from the time you borrow.
- Larger loan amounts. Although it’s not a good idea to borrow more than you need, you’ll find that installment loans come in larger amounts — typically up to $5,000. This could help you cover more expenses and tie you over for a longer period of time. Be sure you can afford the monthly repayments before you apply for a large amount.
- Lower interest rates. Installment loans typically come with lower interest rates since you’re borrowing over a longer period of time. You’ll want to consider the total amount you’ll be charged on top of principal to be sure you’re getting a better deal with an installment loan versus a payday loan.
More alternatives to payday loans in Massachusetts
While getting a payday loan in Massachusetts isn’t possible, you may be able to get access to credit or cash in other ways. Some options include:
- 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.
- Look into government resources. Massachusetts also has a few programs to help families in need. The Supplemental Nutrition Assistance Program (SNAP) and Transitional Aid to Families with Dependent Children (TAFDC) are two programs you might want to consider when making ends meet is tough.
Even more alternatives to payday loans
Bottom line
Even though you can’t get a payday loan in Massachusetts, there are other options available when you’re in a bind. You could consider an installment loan that comes with a longer repayment period or look into local government resources.
Frequently asked questions
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