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Capped at 50% all-in APR — not 36%, as several guides state. The 36% figure is a trigger: above it, the lender must prove you could afford the loan.
Several consumer guides describe Minnesota as having adopted a 36% cap effective January 2024. That is not what the law says.
SF 2744 caps the all-in APR on consumer small loans and consumer short-term loans at 50%. The 36% figure is a trigger, not a ceiling: above 36%, the lender must carry out an ability-to-repay analysis.Minnesota · StatuteMinn. Stat. § 47.60(g) — a loan made under this section with an annual percentage rate that exceeds 36 percent must comply with section 47.603
The distinction matters. A borrower who believes the ceiling is 36% would conclude a 45% loan is unlawful. It is not — but it does carry an underwriting requirement the lender may not have met.
Above 36% all-in APR, the lender must perform an ability-to-pay analysis based on your debt-to-income ratio for the loan period, supported by documents evidencing your net income, major financial obligations and basic living expenses.Minnesota · Legal analysisMinnesota SF 2744 — a lender must engage in an ability to pay analysis if the all-in APR exceeds 36%, based on the borrower's debt-to-income ratio supported by documents evidencing net income, major financial obligations and basic living expenses
If you were lent above 36% and nobody asked for evidence of your income and outgoings, that is worth raising with the Department of Commerce.
Consumer small loan — unsecured, consumer purpose, $350 or less, repayable in a single instalment.
Consumer short-term loan — principal or credit advance of $1,300 or less, requiring a minimum payment of more than 25% of the balance within 60 days.
The APR definition was also amended to include all interest, finance charges and fees, and the law codifies predominant-economic-interest and totality-of-circumstances tests for identifying the true lender.
You can revoke authorisation and instruct your bank to stop the payment, whatever your agreement says.
What Regulation E says about automatic payments →
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A payday loan is a consumer debt. If it goes unpaid, two Minnesota rules decide what a lender can do next: how long it has to sue you, and how much of your pay a court can order taken.
Being sued over an old payday loan? A collector can still file, but the time limit is a defence you can raise — and you cannot be jailed for the debt. What can and cannot happen if you don’t pay →