Installment Loans in Louisiana and What State Law Allows

Can a lender in Louisiana legally make you an installment loan, and how much can it charge? Yes, if it is licensed. State law caps the interest by loan size, starting at 36% a year on the first $1,400 of principal and stepping down to 21% on anything above $7,000. Since August 1, 2026, a licensed lender may also charge an origination fee of up to $75, up from $50.

Those rules come from the Louisiana Consumer Credit Law (La. R.S. 9:3510 and following). The Louisiana Office of Financial Institutions (OFI) licenses and examines the lenders. If you are buying a home soon, the loan matters for a second reason: it will show up in your mortgage file.

The caps work like tax brackets. Each slice of the balance gets its own ceiling under R.S. 9:3519, and none of them changed in the 2026 session, according to OFI's July 2026 memo.

Take a $5,000 loan. The first $1,400 can carry 36%, the next $2,600 can carry 27%, and the last $1,000 can carry 24%. The blended maximum works out to roughly 29% a year.

Fees sit on top. Act 402 lets the lender charge the $75 origination fee only once per loan in any 30-day stretch, however many times the loan is renewed or refinanced in that window. That fee is not refunded if you pay the loan off early. The sources used here do not list statutory minimum or maximum terms or loan amounts for these loans.

Louisiana's payday rules come from a separate law, the Deferred Presentment and Small Loan Act. Payday loans are capped at $350, with fees of up to $20 per $100 plus a $10 documentation fee, and they are usually due in about 14 days. One consumer-finance guide, DebtHammer, calculates that a $100, 14-day advance works out to about 697% APR. To roll one over, you must first pay 25% of the principal plus fees.

Every payday contract must also offer an Extended Payment Plan. If you ask in writing before the due date, the balance converts into equal installments with no added finance charges.

Other states draw these lines differently, so a loan advertised from across the line in Mississippi runs under other rules.

DebtHammer reports online installment loans offered to Louisiana borrowers at APRs of about 149% to 299%, well above the state caps. It also reports tribal lenders operating here without state licenses. It says their loans may be legally uncollectible. Treat both claims as secondhand. They come from a lower-credibility source, not from OFI.

The Center for Responsible Lending documents "rent-a-bank" deals, in which a lender uses a bank partner to get around state rate caps. Its examples are from North Carolina, and these sources do not show how common the practice is in Louisiana.

There is a practical check. OFI requires the lenders it licenses to have a physical Louisiana location. Before you sign, you can ask OFI's Non-Depository Division (225-925-4660) whether a lender is licensed.

The sources here do not cover credit union payday-alternative loans or Louisiana assistance programs, so ask your own credit union what it offers. A 2026 bill, HB 952, would add ability-to-pay rules and a 60-day late-fee suspension after a FEMA disaster declaration. It passed the House 78 to 11. As of its last recorded action, a Senate committee hearing on May 6, 2026, it was not law.

An underwriter reads your bank statements line by line. A new loan shows up in two places: once as a deposit, and again as a recurring debit each month.

Expect a request for a letter of explanation covering what the loan was and why you took it. The monthly payment also goes into your debt-to-income ratio, and that ratio can shrink the loan amount you qualify for.

Paying the loan off before you apply removes the payment from the ratio. Be aware that the money you used to pay it off will be questioned too. If you are already under contract, do not take out a new loan before closing, and ask your loan officer how your lender treats one you already have.