Loan Rates and Fees in Connecticut

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

Licensed small loan lenders in Connecticut charge interest on the unpaid principal balance - not on the original loan amount. For closed-end small loans under $5,000, the APR may not exceed 36%. The maximum unsecured small loan amount is $1,800 for loans secured only by credit life insurance; secured loans may be higher.

On a $1,000 loan at 36% APR repaid in 12 equal monthly installments, interest on the declining balance totals approximately $199, making total repayment roughly $1,199, or about $99.92 per month. Your federal Truth in Lending disclosure will show the exact APR and total of payments. No separate origination fee is allowed; the interest rate is the lender's only permitted charge.

• Refinancing creates a new loan - compare your remaining balance to the new loan's total of payments before you agree.
• Returned payment fee and late fee: verify the exact amounts with the Connecticut Department of Banking before you sign.
• Prepayment: interest is calculated on the unpaid balance, so paying early reduces your total interest cost - see Installment loans in Connecticut for details.

If an offer includes charges beyond the rate above, verify with the Connecticut Department of Banking.

• Total of payments: the single most important number on the agreement - this is what you'll actually repay over the full term, including all interest.
• If the offer includes credit insurance or a "protection plan," ask whether it's required - it's usually optional and increases your total cost.