The 24% APR Cap
D.C. Code § 28-3301 sets a maximum interest rate of 24% APR on any loan made in the District. Since payday lenders nationally typically charge rates well over 300% APR, this cap makes the traditional payday loan business model unviable in DC — the law effectively bans the product outright.
Active Enforcement
The DC Office of the Attorney General enforces this cap aggressively. In 2024, the OAG sued online lenders for charging over 300% effective interest on loans to DC residents while misrepresenting the true cost through complex fee structures — a reminder that out-of-state and online lenders don't get a pass on the local rate cap just because they operate remotely.
What This Means for Borrowers
Any offer advertised to a DC resident at an APR meaningfully above 24% — regardless of how the fees are labeled — is not a lawful payday loan under DC law. Legitimate short-term credit options in the District are priced within that 24% ceiling.
| Factor | DC Rule |
|---|---|
| Interest rate cap | 24% APR (D.C. Code § 28-3301) |
| Traditional payday loans | Effectively prohibited |
| Enforcement | Active OAG litigation against violators |
| Typical payday APR elsewhere | Often 300%+ — far above the DC cap |
Since traditional payday loans have no legal path in DC, comparing licensed personal-loan offers priced within the 24% cap is the realistic starting point for District residents.
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