Can a licensed lender in Virginia charge you a triple-digit rate on an installment loan? No. Under the Code of Virginia text current as of September 2026, a licensed consumer finance company can charge no more than 36 percent a year in interest, on loans of $300 to $35,000 repaid over 6 to 120 months.

That cap has a gap, though. It binds state-licensed lenders, not banks. The gap matters if you are weighing an online offer, and the loan itself matters if you are about to buy a house.

What Virginia's installment loan law sets

Installment lenders that are not banks or credit unions are licensed under Chapter 15 of Title 6.2, "Consumer Finance Companies". They are regulated by the Bureau of Financial Institutions, a division of the Virginia State Corporation Commission. The rules below took their current shape in a 2020 overhaul that took effect January 1, 2021.

Under § 6.2-1520, interest can be charged only on the unpaid balance. Add-on interest, which is charged on the original amount for the whole term, is not allowed, and neither is compounding. The processing fee is not counted as interest, so a loan's full cost can run above 36 percent once that fee is included.

Rule Chapter 15 installment loan
Loan amount $300 to $35,000
Term 6 to 120 months, at least six equal payments
Interest cap 36% a year, on the unpaid balance only
Processing fee Greater of $50 or 6% of principal, never more than $150
Late fee $20, once per payment, only after 10 days late
Returned check fee Up to $25
Refinancing A new processing fee no more than once in 12 months
Early payoff Repay within 30 days and the processing fee is rebated, minus up to $50

Smaller loans of up to $2,500 fall under a separate chapter for short-term lending. That chapter carries the same 36 percent cap, plus a monthly maintenance fee of up to $25. Those loans are the subject of the page on payday loans in Virginia.

Where the 36 percent cap stops

Virginia's general usury limit, meaning the default ceiling for loans no other law covers, is 12 percent a year. Banks are exempt from it and may charge whatever installment rate the borrower agrees to, according to Troutman Pepper Locke. Some online lenders partner with out-of-state banks, and that is how an offer above 36 percent can reach a Virginian.

Senate Bill 1252 aimed to close that route. It passed both chambers and was vetoed on April 2, 2025, so the exemption remains. The sources for this page say nothing about tribal lenders in Virginia.

Since 2021, licensed lenders may operate entirely online without a Virginia office. They still need a license, and the SCC's license lookup will show whether they have one. A lender that is neither licensed nor a bank is a warning sign.

Is there anything cheaper?

Possibly, but the sources behind this page do not cover it. Ask your credit union whether it offers a payday alternative loan. We could not confirm any Virginia assistance programs, so we name none.

How a mortgage underwriter reads this loan

If you are under contract on a house, an installment loan shows up in your file in three places.

First, the monthly payments appear as recurring debits on the bank statements you hand over. Second, a loan opened recently may prompt a request for a letter of explanation, which is a short signed note saying what the debt is and why you took it. Third, the payment counts in your debt-to-income ratio, the share of your income that goes to debts. A small payment can still push a tight file over your lender's limit.

If you pay the loan off before applying, the payment usually drops out of the ratio. The payoff money will still show on your statements, so keep the payoff letter. Taking out a new loan between approval and closing counts as new debt, so tell your loan officer before you sign anything.