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 |
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.
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