Minnesota 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: Minnesota is one of the more recent states to overhaul its payday lending rules — the current 36% cap has only been in effect since 2024, but it's already reshaped what's actually available to borrowers.

Who this is forThis guide is for Minnesota 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

The 36% All-In APR Cap
The Ability-to-Repay Tier
What's Changed for Borrowers

The 36% All-In APR Cap

Signed into law by Governor Tim Walz in 2023 and effective January 1, 2024, Minnesota's rate cap limits the all-in APR on consumer small loans — payday loans included — to 36%, counting every fee and charge in that number. Loans are also capped at $350, with a maximum 30-day term and no rollovers permitted.

The Ability-to-Repay Tier

Minnesota's law has a graduated structure: lenders charging between 36% and 50% APR must evaluate whether the borrower can actually repay the loan before issuing it. Anything priced above 50% APR is outlawed outright, regardless of underwriting.

What's Changed for Borrowers

Since the cap took effect, storefront payday lender density in Minnesota has dropped noticeably, as the high-fee model that defined the industry elsewhere isn't viable within a 36% ceiling. What remains are smaller loans, shorter terms, and lenders who have to verify you can actually afford to repay before lending to you in the first place.

Factor	Minnesota Rule
All-in APR cap	36%
Maximum loan amount	$350
Maximum term	30 days
Effective date	January 1, 2024

Verify current rules with the Minnesota Department of Commerce before applying with any short-term lender.

Because Minnesota's cap is relatively new, it's worth confirming any lender you're considering has actually updated its pricing to comply — not every advertisement catches up to a rate change immediately.

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

Minnesota Payday Loan FAQ

Are payday loans legal in Minnesota?

High-cost payday loans are effectively gone. A 36% all-in APR cap took effect January 1, 2024.

What is the payday loan rate cap in Minnesota?

36% all-in APR, with a maximum loan of $350 and a 30-day maximum term.

When did Minnesota cap payday loans?

January 1, 2024.

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