Installment loans are legal in Florida, and the state caps what they can cost. Under the Florida Consumer Finance Act (Chapter 516 of the Florida Statutes), any lender charging more than 18% a year on a loan of $25,000 or less needs a license from the Florida Office of Financial Regulation. Even a licensed lender may charge no more than 36% a year on the first $10,000.

This matters if you are thinking about a personal loan to cover a gap before closing. The cap is real, it went up in 2024, and a loan priced above it cannot be enforced in the state.

How Florida's rate cap is built

The cap works like income tax brackets. Each slice of the loan is charged its own rate, and the rate on each slice goes down as the balance goes up. Section 516.031 allows 36% on the first $10,000, 30% on the portion from $10,000 to $20,000, and 24% on the portion from $20,000 to $25,000. Lenders must compute interest as simple interest. Add-on interest, a method that charges interest on the original balance even after you have paid part of it down, is not allowed.

These tiers are recent. Before July 1, 2024, the cap was a flat 18% with exceptions. House Bill 1347 raised it. The same bill extended the grace period before late charges from 10 days to 12. It also requires lenders to suspend delinquency charges, repossessions and collection suits during FEMA-declared disasters.

The statute also fixes the fees a lender may add on top of interest, and it bans prepayment penalties. A lender cannot take a wage assignment, meaning a claim on your paycheck, as security for the loan. The key figures, as of the 2026 statutes:

Item Florida rule (Chapter 516)
Maximum loan $25,000
License required Above 18% a year
Rate cap 36% / 30% / 24% by tier
Investigation fee Up to $200
Credit investigation Up to $25
Late charge Up to $15 a month
Bad check $20 or the bank's actual charge
Prepayment penalty Prohibited
Minimum term or amount Not set in the sources we used

What the cap means on a small loan

APR, the annual cost with fees included, runs higher than the headline rate on small loans because fees weigh more on a small balance. The National Consumer Law Center calculated that Florida's 2024 change raised the maximum APR on a $500, six-month loan from 48% to 52%. On a $2,000, two-year loan it rose from 31% to 37%. NCLC counts the change as a weakening of consumer protections.

Loans the cap does not reach

Banks, credit unions, title lenders and pawnbrokers operate under other authority and are excluded from this license. Payday loans fall under their own rules: a $500 limit and fees of 10% plus $5, which are set out in the Florida payday loan rules.

If you borrow online, look at where the loan is collected, not where it was written. Section 516.02 says an over-cap loan "wherever made, is not enforceable in this state." One consumer guide reports that some tribal lenders operate without a Florida license by claiming sovereign immunity. Our sources do not document how often that happens. Before you sign anything, check the lender's license through the Office of Financial Regulation.

We could not find sourced terms for credit union payday-alternative loans or for named Florida assistance programs. If you want either, ask a local credit union directly.

If you are closing on a house soon

A new installment loan does not stay private during underwriting. The deposit of the loan money and each monthly payment appear on the bank statements you hand your lender. Expect to be asked for a letter of explanation, a short written note saying what a deposit or debt is. The payment also adds to the monthly debts your lender weighs against your income.

Talk to your loan officer before you borrow, not after. If you already have one of these loans, Florida's ban on prepayment penalties means paying it off early costs you no penalty. Ask your lender whether a payoff before you apply, or before closing, changes how the loan is counted.