12 States Where Payday Loans Are Banned (And What To Do Instead)

Payday lending is banned or effectively banned in 12 US states — usually via a 36% APR usury cap that makes single-payment payday loans economically impossible. If you live in one of these states, here's what to do instead.

The 12 restricted states

Outright bans:

• New York
• New Jersey
• Connecticut
• Massachusetts
• Vermont
• Pennsylvania
• Maryland
• West Virginia
• Arkansas
• Georgia
• North Carolina

36% APR cap (effective ban):

• Montana

If you land on our site from any of these states asking about payday loans, we redirect you to personal loan options — because that's what's actually legal and available where you live.

What to do instead (state-by-state)

New York → Personal installment loans up to $25,000. New York has strong lender licensing, so quality is high.

New Jersey → Personal loans starting at $500. NJ lenders funded 4.2 million personal loans in 2025.

Pennsylvania → Personal installment loans + Payday Alternative Loans (PALs) from federal credit unions. PALs cap at 28% APR — cheaper than any payday loan even in states that allow them.

Massachusetts → Personal loans and credit-union PALs. MA has the strongest consumer protections in the country.

Connecticut → Personal installment loans. CT prohibits single-payment loans under 12% APR for amounts under $15,000 unless licensed — which effectively kills payday.

North Carolina → Personal loans + credit-union PALs. NC has banned payday lending since 2006.

Georgia → Personal loans + credit-union PALs. GA also restricts certain for-profit credit repair — see our avoid predatory lenders guide.

Maryland, West Virginia, Arkansas, Vermont, Montana → All offer personal installment loans through our lender network.

Why these states banned payday

Every state that banned or capped payday lending did so for the same reason: the average payday borrower rolled their loan 8 times per year, ending up paying $650+ in fees on a $300 loan. State legislatures decided that harm outweighed the "access to credit" argument.

The evidence backs this up: personal loan and credit-union PAL usage in these states is HIGHER per capita than in states with legal payday lending, and delinquency rates are LOWER. Turns out borrowers do fine with slower, cheaper credit options once payday isn't available to trap them.

Same-day funding is still possible

Being in a restricted state doesn't mean waiting a week. Personal loans from our network can fund same-day (before 2 PM ET) or next business day. You get:

• Similar speed
• 5–10x cheaper total cost
• Fixed monthly payments instead of a single balloon due date
• Credit reporting (payday loans usually don't report; personal loans do — building your credit history)

What if I still need payday specifically?

You can't legally get one in these states. Beware ANY website offering "payday loans in New York" or "same-day cash advance in New Jersey" — those are either:

• Unlicensed tribal or offshore lenders (skip)
• Advance-fee scams (definitely skip)
• Personal loans marketed as payday (fine, but understand what you're actually getting)

Our network only routes you to licensed lenders in your state. If payday isn't legal where you live, we don't try to shove it through — we switch you to personal loans automatically.