Payday lending is legal in New Hampshire (however, restrictions apply).
New Hampshire has a $500 limit on payday loans offered in the state. The minimum loan term is 7 days; the maximum loan term is 30 days. The APR is capped at 36%, lenders cannot set higher rates for their loans. Rollovers are not allowed. Criminal actions against borrowers are prohibited.
New Hampshire officially restricted its payday lending regulations in 2009 when it placed a 36% APR cap on all small cash loans in the state. From then on, all lenders willing to operate in the state had to adhere to the existing limitations. In the result, according to the 2016 report in the Journal of Economics and Business, there were no licensed lenders in New Hampshire and only 15 were revealed altogether, judging by the data about payday lenders based on NAICS codes.
New Hampshire Payday Lending Statutes
Payday lending in New Hampshire is regulated by N.H. Rev. Stat. Ann. 399-A:1 et seq.
All lenders willing to give loans to New Hampshire residents (including online ones) must be licensed as a Small Loan Lender by the Banking Department to operate in the state.
The state imposes pretty strict limitations corresponding interest rates in order to protect borrowers and not to allow lenders to violate consumers’ rights by gaining huge profits out of such charges.
Loan Amount in New Hampshire
- In the state of New Hampshire, a borrower can take out a loan not exceeding $500 in amount.
- According to the law, a borrower in New Hampshire is allowed to have no more than one outstanding loan at a time. Taking any other loans from other lenders provided that you haven’t repaid your previous debts is considered illegal and is fraught with the problems to both a borrower and a lender.
Rates, fees and other charges in New Hampshire
- APR for payday loans in New Hampshire is capped at 36% and no lending company can charge more than that.
- Financial charges are also restricted to a minimum and should not exceed $1.38 for a $100 loan given for a period of two weeks. This refers to any of the following – processing fee, approval fees or the like.
Maximum term for a payday in New Hampshire
- The repayment period should be at least 7 days and not more than 31 days according to the state law of New Hampshire.
- In the state, there is also a law about a cooling-off period: a person can apply for another loan only 60 days after the date when the previous loan was fully repaid.
- However, no rollovers and renewals are allowed in the state for payday loans; all the loans should be repaid in due time. Borrowers are eligible to take out another loan from the same lender provided that they repaid the previous debt.
- Defaulted payments are not considered a criminal offense in the state of New Hampshire. Therefore, borrowers should not be afraid of the threats from lenders who promise criminal lawsuits. The only case when a borrower risks getting into the court trial is when he or she purposefully took out a loan without intentions to repay it. If it is proved that the repayment was stopped or an account closed deliberately, a borrower is likely to get into serious trouble. This is what concerns criminal actions; when it comes to civil trials – they are legal and are not prohibited in case borrowers do no repay in time.
- Collection fees are not specified, so lending companies are free to set the rates themselves on their own accord.
More information about payday loans in New Hampshire can be found on the official website of the New Hampshire Banking Department.
The History of Payday Loans in New Hampshire
- April 13th, 2003 – Nowadays – The New Hampshire Banking Department has been regulating payday lending industry in the state.
- 2006 – The Military Lending Act effectively capped payday loans offered to the military at 36% APR. This federal law has no exceptions, thus, no lender in New Hampshire is now allowed to offer loans to the military in excess of 36% APR.
- January 1, 2009 – New legislation went into effect in New Hampshire with regard to payday loans. It effectively prohibited charging APR in excess of 36% APR for payday loans. It did not technically prohibit the operation of payday lenders in the state, however, many companies decided to close the centers in New Hampshire as the aforementioned terms rendered the entire business unprofitable.
- June 2, 2016 – The Consumer Financial Protection Bureau (CFPB) proposed a Payday Loan Rule that hasn’t yet fully come into effect (expected in November 2020).
- Present days – Payday loans are now officially legal in New Hampshire, however, not many offers are there to be found.
(As of May 2019)