Can you still get a small installment loan in Hawaii, and what can it cost? You can, from a state-licensed lender. The loan is capped at $1,500, a term of 12 months and interest of 36% a year.

Those limits come from Hawaii Revised Statutes Chapter 480J, the Installment Loan Law. It was passed as Act 56 in 2021 and took effect January 1, 2022, replacing the state's payday loan statute. The regulator is the Division of Financial Institutions (DFI) within the Department of Commerce and Consumer Affairs. The DFI keeps its installment lender resources online. Figures below come from the statute and the DFI's FAQs as posted in January 2026.

What Hawaii allows, in one table

Rule Hawaii limit under HRS 480J
Loan amount Up to $1,500 from one lender to one consumer
Interest Up to 36% a year on the unpaid principal
Monthly maintenance fee $25 to $35 depending on principal, prorated daily since July 1, 2025
All charges combined No more than 50% of the principal
Origination or deferment fees Not allowed
Late charge $30 on an installment unpaid 10 days after its due date
Term 2 months minimum up to $500, 4 months above $500, 12 months maximum
Renewals One, then the balance must be repaid
Cancellation Until 5 p.m. HST on the third business day, full refund

The 50% ceiling is the number that matters most. On a $1,000 loan, interest and fees together cannot pass $500, according to HRS § 480J-2. The loan cannot be secured by a lien on your car or home. The DFI's consumer FAQ says you can pay it off early with no penalty.

The daily proration rule came from Act 116, signed May 29, 2025. Before it, a borrower who paid off early in the month could still owe that whole month's maintenance fee. A 2026 bill, HB1048, would repeal the three-day wait between loans. Its text on the legislature's site is still a draft, so whether that change is law is not yet settled.

Can a lender work around the cap?

The law was written to stop that. A lender that partners with a bank to avoid a state rate cap is often called a "rent-a-bank" lender. Hawaii's definition of an installment lender includes anyone who arranges a loan or acts as an agent for a third party, according to Ballard Spahr's analysis. A loan made without a required license is void, and none of its charges can be collected.

Online lenders need the same license, which they get through NMLS, the Nationwide Multistate Licensing System. You can check any lender at nmlsconsumeraccess.org. Our sources do not address tribal lenders. Treat any lender you cannot find there as a warning sign. Other warning signs are a loan over $1,500, a term over 12 months, an origination fee, or a request for collateral. Deferred-deposit loans are banned outright, as covered on our page about payday loans in Hawaii.

Cheaper credit is sometimes available

Banks and credit unions are exempt from Chapter 480J. Financial services loan companies fall under a separate chapter, and HRS § 412:9-302 caps their simple-interest loans at 24% a year. Act 116 confirmed that lower-rate lending under those laws is still allowed. Our sources do not list credit union payday-alternative loan terms or Hawaii assistance programs, so ask your credit union directly.

How an underwriter reads this loan

If you are closing on a house, an underwriter will see this loan in your file. The underwriter is the person at the lender who approves or denies your mortgage.

The payments show up as recurring debits on your bank statements, and that often prompts a request for a letter of explanation. While the loan is open, its monthly payment usually counts in your debt-to-income ratio. That ratio compares your monthly debts to your income.

Paying the loan off before you apply, and keeping the payoff letter, removes the payment. How a lender treats a recent payoff varies, so ask your loan officer before you do it. Do not take out a new loan between contract and closing without asking first.