Minnesota Payday Loans

Access swift funds in the Land of 10,000 Lakes with zaving's easy online application process for Minnesota payday loans.

Last updated by Zaving Editorial Team, on April 15th, 2024

Are you facing unexpected financial challenges in Minnesota? Wherever you are in the state, when you need quick financial assistance, consider zaving for hassle-free payday loans. Experience a seamless online application process and gain access to the funds you require for peace of mind.

What are payday loans and can I get them in Minnesota?

Payday loans are short-term, high-interest loans typically designed to provide quick cash to individuals facing immediate financial needs, with the borrower typically expected to repay the loan on their next payday. These loans often come with high fees and interest rates, making them an expensive form of borrowing.

In Minnesota, payday loans – also known as consumer small loans – are legal and available from both storefront locations and online platforms.

However, there are restrictions and regulations in place to protect consumers.

To qualify for a loan, applicants will need to meet a number of criteria, including:

  • Age: You must be at least 18 years old.
  • Income: Proof of a regular source of income is required.
  • Residency: You must be a U.S. citizen or permanent resident and live in Minnesota.
  • Bank account: An existing checking account is usually necessary.
  • ID: Applicants are typically required to provide a valid, government-issued photo ID for identity verification.


Even with legal protections in place, before applying for a payday loan in Minnesota it's crucial to thoroughly review the loan’s terms and conditions and ensure you are able to repay the loan on time.

What are the rules for payday loans in Minnesota?

Historically, while payday loans in Minnesota were capped at a maximum of $350, lenders in the state could charge high interest rates in excess of 200% APR. However, on January 1, 2024, a new law came into effect. Minnesota’s new rules make significant changes and aim to better regulate consumer small loans.

Key features include:

  •  Maximum APR: The maximum APR is set at 36%, with an option to charge up to 50% if the lender conducts an ability-to-repay analysis. This analysis considers debt-to-income ratio and living expenses.
  • Maximum loan amount: The maximum amount that can be borrowed remains $350.
  • Loan term: The maximum length of a loan is generally less than 30 days.
  • Fees: The ‘all-inclusive’ APR includes all interest, fees, and charges – no additional charges are allowed.
  • No evasion: “No evasion” language outlines requirements for lenders and closes loopholes to prevent them from skirting the rules.


While some have expressed concern about potentially restricted access to credit for vulnerable populations, the focus of these changes is to curb predatory lending practices and protect borrowers from falling into unsustainable debt cycles.

What are the pros and cons of payday loans in Minnesota?

If you are considering taking out a payday loan in Minnesota, it is important to weigh up the pros and cons of this financial option.

Pros:

  • Consumer protection: The enhanced regulations contribute to increased consumer protection by setting clear limits on interest rates, fees, and charges. This helps safeguard borrowers from exploitative lending practices.

  • Affordability: With the new cap on APR and the requirement for lenders to conduct an ability-to-repay analysis, there is a greater emphasis on ensuring that borrowers can realistically afford the loan. This can lead to more responsible lending practices.

  • Increased transparency: The “all-inclusive” APR requirement provides borrowers with a clearer picture of the true cost of the loan, including all fees and charges, allowing for informed decision-making.

  • Healthier lending practices: The stricter regulations aim to close loopholes and limit predatory behaviour employed by some lenders, promoting fairer lending practices.

Cons:

  • Limited loan amount: The maximum loan amount remains at $350, which might not be sufficient for larger emergencies, potentially forcing borrowers to seek multiple loans and accumulate more fees.

  • Potentially limited access to credit: Stricter regulations may lead to a more cautious approach by lenders, potentially resulting in reduced availability of payday loans. This could limit access to credit for individuals who relied on these loans in the past.

  • Adjustment period for lenders: Lenders may need time to adapt to the new regulations, leading to temporary disruptions in the availability of payday loans. Borrowers may face challenges during this adjustment period.

  • Impact on credit scores: While payday lenders may not conduct traditional credit checks, defaulting on payday loans can still negatively impact a borrower's credit score and financial standing.

More of your frequently asked questions about payday loans in Minnesota

Can I take out multiple payday loans in Minnesota?

No, borrowers are not allowed to have more than one payday loan simultaneously in Minnesota. Borrowers are limited to a single payday loan at a time, and each loan must adhere to the statutory regulations, including the maximum loan amount of $350. In addition, rollovers, which involve extending or renewing a payday loan by taking out a new loan to cover an existing one, are not allowed under Minnesota law. These restrictions are in place to prevent borrowers from falling into a cycle of debt and to promote responsible lending practices within the payday loan industry.

What happens if I can't repay my payday loan in Minnesota?

If you are unable to repay your payday loan in Minnesota, it can lead to various consequences. Defaulting on the loan may result in additional fees, increased interest charges, and potential damage to your credit score. Lenders might also employ debt collection practices. It's crucial to communicate with your lender if you're facing difficulties to explore possible alternatives or arrange a repayment plan. Seeking advice from financial counselors or exploring local resources for assistance can also be beneficial if you find yourself struggling to repay your payday loan.

Can I get a payday loan in Minnesota with bad credit?

Yes, you can still get a payday loan in Minnesota with bad credit, even with the new regulations implemented in January 2024. Payday lenders typically consider factors such as the borrower's income and ability to repay the loan rather than relying solely on credit scores. However, while payday lenders typically don't run traditional credit checks, under the new rules they may conduct an ability-to-repay analysis. This means they will assess your income, expenses, and existing debts to determine if you can afford the loan without falling into a cycle of debt.

What are some alternatives to payday loans in Minnesota?

If you're seeking alternatives to payday loans in Minnesota, several options can provide financial assistance without the associated high costs. Credit unions and community banks often offer small-dollar loans with more favorable terms than payday lenders. Additionally, non-profit organizations can provide affordable alternatives, including zero-percent interest loan refinancing programs. These programs aim to help individuals escape the cycle of payday loan debt and provide a more sustainable path towards financial stability. Exploring these community-based and non-profit options can offer more affordable and responsible financial solutions for those in need.