Can you legally take out a payday loan in Maryland? Not at payday-loan prices. As of September 2026, Maryland caps interest on small consumer loans at about 33% a year. According to the state's Office of Financial Regulation, that makes the triple-digit rates a payday loan depends on illegal.

For comparison, payday loans in states without caps typically run 300% to 400% APR, LegalClarity reports. The business model does not work at 33%. So the risk for a Maryland borrower is no longer a legal payday lender. It is a lender that ignores the law.

Which law sets the cap

The baseline is Commercial Law § 12-102. It says a lender "may not charge interest in excess of an effective rate of simple interest of 6 percent per annum" unless another statute allows more.

For small loans, the statute that allows more is § 12-306. The Commissioner of Financial Regulation, part of the Maryland Department of Labor, licenses lenders and enforces the caps.

Rule Maryland limit (as of Sept. 2026)
Loans covered Consumer loans of $25,000 or less
First $1,000 of a loan of $2,000 or less 2.75% a month (33% a year)
Amount above $1,000 on that loan 2% a month (24% a year)
Loans over $2,000 2% a month on the whole amount (24% a year)
Refinancing No more than 60 days' interest then due may be added
Maximum term 30 to 72 months, depending on principal
Returned-payment fee Up to $35

The rate rows come from the Office of Financial Regulation. The refinancing and term rows come from the § 12-306 text, which also contains an older, lower tiered schedule. The fee row comes from DebtHammer's summary.

The sources we used describe no Maryland rules on rollovers, cooling-off periods, loan databases or extended payment plans. That fits a state where no licensed payday product exists for such rules to govern.

Online and tribal lenders still reach Maryland

Every lender serving Maryland residents must be licensed by the Commissioner, whether it operates from a storefront or online. Under the state's licensing rules, a consumer loan acquired by an unlicensed lender is unenforceable.

Some online lenders claim tribal sovereign immunity to get around the cap, DebtHammer notes. Before you borrow, look up any lender at nmlsconsumeraccess.org. You can also call the Office of Financial Regulation at 410-230-6077.

Apps are the exception, with new limits starting October 1

A 2025 law, HB 1294, exempted app-based lenders from Maryland's small-dollar lending law. The Center for Responsible Lending says some of these apps charged effective APRs above 300% by calling their fees "tips." A state market inquiry found Marylanders paid over $35 million in fees on 5.5 million of these transactions between 2019 and 2024.

Gov. Wes Moore signed SB 94 on April 28, 2026. It takes effect October 1, 2026. The law bans tips on these apps and restores anti-discrimination and unfair-practice rules. It also requires providers to offer at least one no-cost option, HRMorning reports. It does not bring the apps back under the 33% cap.

What Maryland residents can use instead

  • Licensed installment lenders charging within the caps above. Verify the license on NMLS first.
  • An app's no-cost option, which is required from October 1, 2026.
  • Maryland Opportunity Accounts, created by the Access to Banking Act. These accounts come with fee credits for unbanked and underbanked residents.

Credit union small-dollar loans may also be available. Our sources do not cover their Maryland terms, so ask your credit union directly.

If you are applying for a mortgage soon

The sources above cover state lending law, not mortgage underwriting rules. Treat this section as the list of questions to raise with your loan officer.

The bank statements you submit show every debit. A repeating withdrawal to an app or an online lender will be visible. Before you send those statements, ask your loan officer:

  • Will you want a letter of explanation for these debits?
  • Does the payment count in my debt-to-income ratio (my monthly debt payments divided by my gross monthly income)?
  • Would paying the loan off before underwriting help?

If the lender turns out to be unlicensed in Maryland, tell your loan officer that too. Under state law, that loan is unenforceable.