Hawaii Payday Loan Laws, Explained

Last updated: July 20, 2026

By the US Lending Editorial Team · Reviewed for factual accuracy against the federal and state sources cited on this page.

Key takeaway

Key takeaway: Hawaii didn't just cap payday loan rates — it eliminated the traditional payday loan product entirely, replacing it with a different, more borrower-friendly structure.

Who this is forThis guide is for Hawaii residents comparing a payday, cash-advance, or short-term loan, and anyone checking what is legally allowed before they borrow.

When to use itUse it before you accept any offer, so you can compare the total cost across more than one lender.

What this page covers

Act 56 Ended Traditional Payday Loans
What's Legal Now
Licensing Requirement

Act 56 Ended Traditional Payday Loans

Any payday loan contract signed after January 1, 2022 is illegal in Hawaii. Act 56 phased out the old deferred-deposit check-cashing model — where a lender held a postdated check for a fee up to 15% of its face value — and replaced it with a licensed small-dollar installment loan framework.

What's Legal Now

Under Act 56, licensed lenders can offer installment loans up to $1,500, repayable over 2 to 12 months, with the total cost of the loan capped at 36% APR. That's a dramatically different structure than the old two-week, lump-sum payday model — more time to repay, and a real ceiling on the total cost.

Licensing Requirement

Every lender making these small-dollar loans to Hawaii residents must be licensed under the state's consumer lending framework and follow the new installment and rate rules — unlicensed short-term lending, and any structure resembling the old payday product, is prohibited.

Factor	Hawaii Rule
Traditional payday loans	Illegal since January 1, 2022 (Act 56)
Legal alternative	Installment loans up to $1,500
Rate cap	36% APR
Repayment term	2–12 months

Verify current licensing with the Hawaii Department of Commerce and Consumer Affairs before applying.

Since the old payday model no longer exists in Hawaii, comparing licensed installment loan offers within the 36% cap is the accurate starting point for anyone researching short-term borrowing here.

Sources: NCSL — Payday Lending State Statutes · CFPB — Payday Loans

Hawaii Payday Loan FAQ

Are payday loans legal in Hawaii?

Traditional payday loans have been illegal since January 1, 2022 under Act 56, and were replaced with installment loans up to $1,500.

What replaced payday loans in Hawaii?

Installment loans up to $1,500, capped at 36% APR with 2-to-12-month repayment terms.

What is the rate cap in Hawaii?

36% APR.

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