Can an Ohio lender charge whatever it likes on a small installment loan? No. A small installment loan is a personal loan repaid in fixed payments over months. As of September 2026, Ohio caps these loans when the lender holds a state license. The ceiling depends on which of three licenses the lender holds.

All three sit in Chapter 1321 of the Ohio Revised Code, titled "Various Loans." All three are supervised by the Superintendent of Financial Institutions at the Ohio Division of Financial Institutions, which is part of the Ohio Department of Commerce. The same Division handles licensing and consumer complaints.

Three licenses, three sets of caps

Ohio law Loan amount Rate or fee cap Term
Consumer Installment Loan Act (§§1321.62 to 1321.702) Not set in our sources 25% a year on unpaid principal, plus origination fees of $15 to $250 (or 1% of principal) Not set in our sources
Small Loan Law (§§1321.01 to 1321.19) $5,000 or less 28% a year on the first $1,000, 22% above that, or a flat 25% Not set in our sources
Short-Term Loan Law (§§1321.35 to 1321.48) Up to $1,000 Total fees capped at 60% of the original loan 91 days to one year

The Consumer Installment Loan Act states its limit plainly: "A licensee may charge interest not exceeding twenty-five per cent per year on the unpaid principal balances," per §1321.68. That section also caps credit investigation fees at $25. It caps default charges at the greater of 5% of the installment or $15, once per installment. A lender that willfully breaks the section must give back all the interest the borrower paid.

The Short-Term Loan Law came from House Bill 123 and took effect October 29, 2018. It covers the loans that used to be payday loans. Our page on Ohio's payday loan rules covers them in more detail. A consumer-finance blog, DebtHammer, reports that rollovers are prohibited under this law. We have not confirmed that in the statute.

Why a capped loan can still cost triple digits

APR, the annual percentage rate, folds fees into a single yearly cost. On a small loan paid off quickly, a fixed fee makes up a large share of the cost. One consumer guide cites National Consumer Law Center data. It puts the maximum APR at up to 145% on a $500 six-month loan, 31% on a $2,000 two-year loan and 26% on a $10,000 five-year loan.

In 2008, Ohio voters approved a 28% cap on payday loans. Lenders got around it using other licenses and charged over 500% APR, according to the Center for Responsible Lending. Even after the 2018 reforms, the same group found some lenders still charging over 100% APR.

Where Ohio's caps stop reaching

Bank partnerships. In a bank partnership, a bank makes the loan and a nonbank company arranges it. On October 31, 2025, the Division reversed its earlier guidance, as Sheppard Mullin attorneys report. Nonbank companies that arrange bank loans of any size no longer need a Small Loan Act license "unless or until further notice." A loan offered through that route may not carry the Small Loan Law's limits.

Tribal lenders. DebtHammer reports that some online tribal lenders operate outside Ohio's licensing system and charge up to 699% APR. Treat that figure as one blog's estimate.

Pending change. Senate Bill 456 would amend the Consumer Installment Loan Act. It was introduced June 8, 2026, and had no committee hearing as of late September.

Our sources do not cover credit union alternatives or Ohio assistance programs. Ask your own credit union what small loans it offers before you sign anything else.

How an underwriter reads this loan

If you are buying a home soon, the underwriter will see this loan. They will see the deposit and the monthly debits on your bank statements. They may ask for a letter of explanation, a short signed note saying what the loan was for. The monthly payment also counts in your debt-to-income ratio, the share of your income that goes to debt payments. That can shrink the mortgage you qualify for.

Paying it off before you apply removes the payment from that ratio. Paying it off in the middle of underwriting can raise new questions about where the money came from. Tell your loan officer before you do either.