Payday loans often come to mind when it comes to short-term financial solutions. They are designed to provide instant cash for those who are between paychecks. But are payday loans legal in Maryland? This article dives deep into the regulations surrounding these loans in the Old Line State. For a broader look at payday loans and whether they’re legal, we have an article explaining all.

If you’d like help with money, you can apply for a payday loan with us.

Maryland and Payday Loans: The Legal Landscape

No, payday loans are not legal in Maryland. The state of Maryland has banned such loans since 2002. This decision stems from the high interest rates and fees associated with payday loans, which can sometimes exceed 400% annually. To protect its residents from such exorbitant costs, Maryland’s law caps the annual interest rate on small loans at 33%.

Businesses in Maryland are not allowed to offer payday loans to residents. Moreover, online payday lenders are prohibited from providing such loans to Maryland residents. This means that if a resident comes across an online payday lender claiming to offer loans in Maryland, they operate outside the law and should be approached cautiously.

Are Payday Loans Legal in Maryland?
Cheerful beautiful couple sitting at table and using laptop while filling tax return form on website

Implications of the Ban:

Consumer Protection: The ban emphasises Maryland’s commitment to protect its consumers from predatory lending practices. Residents are encouraged to report payday lenders to the Commissioner of Financial Regulation in Maryland.

Alternative Loan Solutions: While payday loans are banned, Maryland residents can access other forms of short-term loans and credit solutions within the state’s regulatory framework. These include personal loans, credit unions, and banks.

Out-of-State Lenders: Some Maryland residents might be tempted to seek payday loans from lenders in neighbouring states. However, these loans can come with high fees and interest rates, putting borrowers at risk of falling into a debt trap.

Beware of Loan Scams

Given Maryland’s prohibition on payday loans, residents should be wary of scams. Some unscrupulous lenders might claim to offer “Maryland-approved” payday loans or use other misleading terms. Always do thorough research and ensure you’re working with a reputable lender.

If you’d like help with money, you can apply for a payday loan with us.

Are Payday Loans Legal in Maryland?

Frequently Asked Questions

What is the maximum interest rate allowed on small loans in Maryland?

Maryland caps the annual interest rate on small loans at 33%.

Are there any short-term loan alternatives in Maryland?

Yes, Maryland residents can consider personal loans, borrowing from credit unions, or seeking assistance from local non-profits and financial counselling agencies.

Can I get a payday loan online if I live in Maryland?

While you might come across online lenders offering payday loans to Maryland residents, remember that such loans are illegal in the state. Engaging with these lenders can expose you to financial risks.

What should I do if a payday lender in Maryland approaches me?

Report them immediately to the Commissioner of Financial Regulation in Maryland. Operating a payday lending business in the state is illegal.

Are there any penalties for payday lenders operating in Maryland?

Yes, payday lenders operating illegally in Maryland can face legal consequences, including fines and potential jail time.

If you’d like help with money, you can apply for a payday loan with us.


While payday loans can seem like a quick fix to financial troubles, the state of Maryland has taken steps to protect its residents from the pitfalls of such loans. Always understand your financial options and seek trusted and legal avenues for short-term financial assistance in Maryland.