Loan Rates and Fees in Massachusetts

Massachusetts does not license payday lenders or authorize short-term, single-payment lending. No licensed lender in the state can offer a payday loan structure.

Licensed small loan lenders in Massachusetts may charge up to 23% per year on your outstanding balance, calculated on a declining basis (the actuarial method) - meaning interest accrues only on what you still owe. Lenders may also charge a one-time $20 administrative fee per loan, which cannot be charged more than once in any 12-month period; no other upfront or origination fees are permitted.

On a $1,000 loan repaid in 12 equal monthly installments at 23% per year, you'd pay approximately $128 in total interest plus the $20 administrative fee, for a total cost of roughly $1,148. After the loan matures, the maximum rate drops to 6% per year on any remaining balance.

• Refinancing requires the lender to give you written notice of your right to keep the existing loan separate and to disclose the additional finance charge - compare your remaining balance to the new loan's total of payments before you agree.
• Returned payment (NSF) fees are not capped by Massachusetts small loan regulations - ask the lender for the exact amount before you sign.
• Late fees are not permitted on small loans in Massachusetts; the lender's only remedy for late payment is continued interest at the contract rate.
• You can prepay in full at any time with no penalty - any unearned pre-computed interest must be refunded using the sum-of-the-digits method.

If an offer includes charges beyond the 23% annual rate and $20 administrative fee, verify with the Massachusetts Division of Banks.