No Payday Loans in North Carolina: Licensed Loans of Up to $25,000

You can't get a payday loan from a licensed lender in North Carolina: the Attorney General says payday lenders have been shut down here. What you can get is an installment loan of up to $25,000 from a licensed finance company, at no more than 33% a year on the first $4,000.

What a North Carolina Finance Company Loan Costs at the Cap

Worked out from North Carolina law, not offers from lenders in our network; a lender can charge less. Each example uses the Consumer Finance Act's top rates and counts the processing fee in the cost and APR.

The fee is up to $30 on loans of $3,000 or less and 1% of the amount financed above that, never more than $150. The Attorney General warns that a $100 to $500 payday loan can carry 390% to 780% a year; the $500 loan above is about 46%, fee included.

• Late fee only after 10 days, one per late payment; NCCOB puts the current maximum at $18.
• Pay off any part early without a penalty; interest runs only on what you still owe.
• At maturity or a court judgment, the rate drops to 8% a year. Confessions of judgment are banned.

Why Payday Lenders Can't Operate in North Carolina

Most loans of $25,000 or less are capped at 16% a year. To charge more, a lender needs a Consumer Finance Act license, which tops out at 33%, far below what a payday fee costs. NCCOB says North Carolina was the first state to ban payday lenders, in 2005, with the Advance America case involving NCCOB and the Department of Justice.

• The act's limits have risen since early 2023, when NCCOB described it as covering loans up to $15,000, with 30% on the first $4,000.
• A loan that violates the Consumer Finance Act is void, NCCOB says, and the lender has no right to collect principal or charges.
• Banks, credit unions and pawnbrokers are exempt from the license and lend under their own rules.

Stuck With an Online Payday Loan? The Attorney General's Advice

The Attorney General warns that online payday lenders still target North Carolinians, often with collection harassment. If you owe one:

• Offer the lender a payment arrangement, such as repaying the principal.
• Cancel its electronic draft with your bank before the draft date, and tell the lender in writing that you've revoked it.
• If drafts continue, open an account at another bank before closing the old one.
• Report threats of arrest or wage garnishment to the Attorney General at 1-877-5-NO-SCAM.

For a short-term need, the Attorney General points to credit union loans, employer salary advances and creditor payment plans. A consumer finance loan costs more than a credit union loan, it says, but less than a payday loan.

The Loan Check That Arrives in Your Mailbox

Some licensed lenders mail unsolicited loan checks. Cash one and you've taken a Consumer Finance Act loan.

• Ten days to change your mind. Refund the full amount of the check within 10 days of cashing it, and the loan is cancelled.
• Military status checked first. The lender must verify whether you're in the military before it mails the check.
• Look for the notice. Every CFA contract must state that the loan is regulated by the North Carolina Consumer Finance Act.

Applying for a North Carolina Finance Company Loan

1. Decide how much you need, up to $25,000, and plan for at least 12 monthly payments: the law sets that minimum.
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. Check the lender's NCCOB license and the Consumer Finance Act notice in the contract. Turn down anything sold as a payday loan.

Confirm the Lender's NCCOB Consumer Finance License

1. On NCCOB's Consumer Finance page, choose Licensees under Find and search for the company's legal name.
2. Check the lender's website too: NCCOB requires licensees to list their license status and license number there.
3. An online lender can hold the license without an office here. If it can't show one, walk away.

Complaints: NCCOB online or at 919-733-3016; it forwards them to the company and sends you the reply. Payday or collection problems: the Attorney General at 1-877-5-NO-SCAM. Servicemembers also have the federal Military Lending Act's 36% Military APR cap.

Common Questions

Official Sources

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