Payday Loans in Montana: Legal at 36%, but No Licensed Lenders

Payday loans are legal in Montana only at 36% a year or less, and the Division of Banking says no payday lenders are licensed in the state today. What you can get is a licensed consumer installment loan, held to the same 36% cap.

What a Licensed Montana Loan Costs Each Month

A Montana-licensed consumer lender can charge interest of up to 36% a year, worked out as simple interest on what you still owe. Here's what that means each month:

Worked out from Montana law, not offers from lenders in our network; a lender can charge less.

Interest can't be precomputed or added on up front, and you can prepay in whole or in part at any time without penalty. The first monthly payment is due within 45 days of the loan.

Fees a Montana Lender Can Add to the 36%

• Late fee. If your contract allows it, the greater of $15 or 5% of the amount past due, up to $50, once per past-due amount: $15 on the $100.46 payment above.
• Deferral fee. The same limit if you agree to push back a payment.
• Returned payment. The greater of $25 or the lender's actual cost.
• Third-party costs. At your option, filing fees, credit insurance, credit report fees and similar charges can be added to the loan.

Apart from an optional GAP waiver and attorney fees a court awards, other fees are barred, and a lender that overcharges must pay you double the excess.

Montana's $300 Payday Loan Rules After I-164

Montana voters approved Initiative 164 on November 2, 2010. From January 1, 2011, it held payday, title and consumer loans and retail installment contracts to 36% a year. Payday lending is still legal, but here's what the cap leaves a lender to charge:

• Loans run from $50 to $300, not counting the fee, for no more than 31 days.
• One loan at a time: no lender can make you a payday loan while you have one outstanding, and loans can't be renewed or rolled over.
• An insufficient-funds fee of up to $30 is the only late charge, once per check or loan.
• You can cancel by 5 p.m. on the lender's next business day by returning the full amount, at no charge.
• Your agreement must say, in bold type, that you can't be prosecuted in criminal court to collect the loan.

Car Title Loans and Online Offers in Montana

• Montana repealed its Title Loan Act effective December 31, 2013, and the Division of Banking has no licensed title lenders.
• A payday loan from an unlicensed lender is void: it can't collect or keep any principal, interest or fees. Out-of-state lenders can be licensed to lend online, but none holds a payday license now.
• An unlicensed consumer loan is void too, and the law reaches anyone using a "device, subterfuge, or pretense" to evade it.
• A company servicing a consumer loan made under the Act needs a Montana consumer loan license as well.
• Banks and credit unions don't need that license and lend under their own rules.

Requesting a 36% Montana Loan

1. Have your ID, proof of income and bank account details ready, and pick a term whose monthly payment you can afford.
2. Submit one request through LendUp. Lenders in our network review it, and any offer shows the APR, payments and total cost before you sign.
3. Before you sign, check that the interest rate is 36% or less and that every fee is one Montana allows.

Finding the Lender's Montana Consumer Loan License

1. Search NMLS Consumer Access by the company's legal name or NMLS number; Montana issues no paper licenses.
2. Look for an active Montana Consumer Loan license. Every license expires on December 31.
3. Match the name and address on the record to your loan documents.

Complaints must be in writing, on the Division of Banking's form by email, mail or fax. Questions: (406) 841-2920. For scams, Montana's Office of Consumer Protection is at (800) 481-6896.

Common Questions

Official Sources

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