The Fairness in Lending Act
Effective January 1, 2021, Virginia's Fairness in Lending Act capped consumer finance loans at 36% APR plus a small monthly maintenance fee. The law didn't just tweak the old payday model — it eliminated single-payment payday loans in favor of longer-term installment loans, raising the maximum loan amount from $500 to $2,500 and setting a minimum term of 4 months (up to 24 months), with limited exceptions.
Why Lenders Are Required to Be Licensed
Any lender offering these products in Virginia must hold a license from the Bureau of Financial Institutions. That licensing requirement, combined with the rate cap, was strict enough that Virginia's largest payday lender at the time, Advance America, announced it would stop operating in the state rather than convert to the new structure.
What This Means If You're Borrowing Now
You won't find a legal single-payment payday loan in Virginia anymore — what's available instead are installment loans from $500 to $2,500, priced at or under the 36%-plus-fee cap, with a repayment window of several months rather than a single due date. That's a materially different product than what "payday loan" typically means in states without this kind of reform.
| Factor | Virginia Rule |
|---|---|
| Rate cap | 36% APR + monthly maintenance fee |
| Loan amount range | $500 – $2,500 |
| Minimum term | 4 months (up to 24 months) |
| Single-payment payday loans | No longer legal |
Because Virginia now regulates this as an installment product with a genuine repayment window, comparing total cost and term length across lenders matters more than comparing a single due-date payoff amount.
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