Washington Payday Loan Laws, Explained
Last updated: July 20, 2026
Key takeaway
Key takeaway: Washington allows payday lending, but regulates it through fee limits and hard usage caps rather than a straightforward APR ceiling — which makes the math a little less obvious than in other states.
How the Fee Cap Works
Under RCW 31.45, Washington doesn't allow interest on payday loans at all — instead, lenders charge a capped fee: 15% on the first $500 borrowed, and 10% on any amount above that up to the loan maximum. A borrower taking the maximum $700 loan would pay roughly $95 in fees total. There's no state APR cap, and because the loan term is short, that fee structure still annualizes to well over 300% APR on a typical two-week loan.
Loan Size and Frequency Limits
The maximum loan amount is $700, or 30% of the borrower's gross monthly income, whichever is smaller. Washington also caps borrowers at 8 payday loans in any rolling 12-month period — a meaningful guardrail against the loan-after-loan cycle common in less-regulated states.
Your Right to an Installment Plan
Before a loan comes due, Washington borrowers can request a free installment repayment plan instead of paying in one lump sum. Loans of $400 or less come with a minimum 90-day repayment plan; loans over $400 come with a minimum 180-day plan. Lenders are required to offer this, not just permit it if asked correctly.
| Factor | Washington Rule |
|---|---|
| Maximum loan amount | $700, or 30% of monthly income |
| Fee structure | 15% on first $500, 10% above that |
| Loans per 12 months | Capped at 8 |
| Free installment plan | 90–180 days, borrower's right on request |
Because Washington limits fees and frequency rather than APR directly, understanding the dollar cost up front — and knowing your right to an installment plan — matters more than comparing headline rates.
Sources: NCSL — Payday Lending State Statutes · CFPB — Payday Loans
Washington Payday Loan FAQ
Are payday loans legal in Washington?
Yes. Washington allows payday loans up to $700, or 30% of monthly income, whichever is less.
How much can you borrow with a payday loan in Washington?
Up to $700, or 30% of your monthly income. You are limited to 8 loans in any 12 months.
What are the fees on a Washington payday loan?
15% on the first $500 and 10% above that. You also have the right to a free 90-to-180-day installment plan.
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