Maryland Payday Loan Laws, Explained
Last updated: July 20, 2026
Key takeaway
Key takeaway: Maryland's payday-loan ban has been stable for over two decades — but a recent skirmish over app-based lending shows the fight to keep it enforced isn't entirely finished.
The 33% Usury Cap
In 2002, Maryland lawmakers capped small consumer loans at 33% APR — for loans of $2,000 or less, that breaks down to 2.75% per month on the first $1,000 and 2% per month above that; loans over $2,000 are capped at 2% per month across the whole balance. That ceiling has made traditional payday lending unprofitable in the state ever since.
The App-Based Lending Wrinkle
A 2025 bill (HB 1294) briefly exempted app-based payday lenders — earned-wage-access and cash-advance apps — from Maryland's small-dollar lending law entirely. Governor Wes Moore signed follow-up legislation (SB 94) that restored some protections, requiring these apps to comply with the law's bans on discriminatory lending and unfair or deceptive practices, even though the 33% rate cap exemption for these apps was not fully reversed.
What This Means for Borrowers
Traditional storefront and online payday lenders remain effectively locked out of Maryland by the 33% cap. App-based cash-advance products occupy a more complicated legal space after the 2025-2026 legislative back-and-forth — worth reading the terms carefully if you're considering one, since the underlying protections have shifted more than once recently.
| Factor | Maryland Rule |
|---|---|
| Usury cap | 33% APR (2.75%/2% monthly tiers) |
| Cap in effect since | 2002 |
| App-based lenders | Partially exempted from rate cap; other protections restored via SB 94 (2025-2026) |
| Traditional payday loans | Effectively prohibited |
Given the recent legislative activity, Maryland borrowers are better served by licensed personal-loan products priced within the 33% cap than by any product marketed as a payday advance.
Sources: NCSL — Payday Lending State Statutes · CFPB — Payday Loans
Maryland Payday Loan FAQ
Are payday loans legal in Maryland?
No. Maryland's 33% APR usury cap, in place since 2002, effectively prohibits traditional payday loans.
What is the interest rate cap in Maryland?
33% APR, structured as 2.75% and 2% monthly tiers.
What about app-based lenders in Maryland?
App-based lenders were partially exempted from the rate cap; SB 94 (2025-2026) restored other borrower protections.
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