The Deferred Presentment Service Transactions Act
Michigan's payday lending is governed by the Deferred Presentment Service Transactions Act (PA 244 of 2005), enforced by the Michigan Department of Insurance and Financial Services (DIFS). It caps a single payday loan at $600, sets a fixed 31-day loan term, and prohibits lenders from tacking on interest or extra charges beyond the permitted fee.
The Sliding Fee Scale
Rather than one flat percentage, Michigan uses a sliding scale that decreases as the loan amount increases: 15% on the first $100, 14% on the second $100, 13% on the third $100, 12% on the fourth $100, and 11% on the fifth and sixth hundred dollars. On the maximum $600 loan, that adds up to a fee lower proportionally than what a smaller loan would cost per dollar borrowed.
Why You Can't Stack Loans
Michigan requires participation in a statewide database that tracks active payday loans in real time, which is what prevents borrowers from taking out a second loan to cover a first one — a common debt-cycle trap in states without this kind of tracking. Lenders are required to check the database before issuing a new loan.
| Factor | Michigan Rule |
|---|---|
| Maximum loan amount | $600 |
| Fee scale | 15% down to 11%, sliding by hundred-dollar tier |
| Loan term | 31 days, fixed |
| Multiple loans | Blocked via statewide database |
Because Michigan's fee scale rewards borrowing closer to the $600 cap rather than smaller amounts, it's worth comparing total dollar cost across lenders rather than assuming a smaller loan is automatically cheaper per dollar.
Compare Michigan lender offers — free, no obligation.
Start Your Free Match →