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Payday loans in Washington

Capped at $700 or 30% of your monthly income, eight loans a year, tracked in a state database — and if you cannot repay, you have a right to a free installment plan.

You have a right to an installment plan, and it costs nothing

If you cannot repay on time, Washington law entitles you to convert the loan into an installment plan — at your request, at any time before the loan is due, with no additional fees.Washington · RegulatorWashington DFI — you have the right to a payment plan; if you cannot repay on time you can ask for an installment plan with no extra fees

The minimum length is set by the size of the loan: 90 days for loans of $400 or less, and 180 days for loans above $400. A 45-day loan becomes a six-month one, and the lender may not charge you for it.

The trade-off is that while you are on a plan you cannot take a new payday loan — which is the point of it.

Eight loans a year, enforced by a database

Washington limits you to eight payday loans in any 12-month period, and caps your total outstanding borrowing at $700 or 30% of gross monthly income, whichever is less.Washington · RegulatorWashington DFI — limits the total loan amount to $700 or 30% of the borrower's gross monthly income, whichever is less, and limits the number of loans to eight in a 12-month period

Every lender must check a statewide database before lending, which is how the limits are actually enforced rather than merely stated. A lender also may not give you a new loan to pay off an old one from the same lender or an affiliate.

What the rules did to the market

Washington’s framework took effect on 1 January 2010. Payday lending locations in the state fell sharply in the years after — and DFI’s 2023 report records just 16 consumer complaints against payday lenders for the whole year, of which 13 were against online lenders.Washington · State reportingWashington DFI 2023 Payday Lending Report — of the 16 complaints received in 2023, 13 were against online payday lenders

That the complaints now come almost entirely from online lending is the pattern to watch. The storefront market is small and well policed; the risk moved.

Maximum borrowing
$700 or 30% of gross monthly income, whichever is less — across all lenders.
Loans per year
Eight, in any 12-month period.
Fees
15% on the first $500; 10% on any amount from $500 to $700. A $500 loan costs $75.
Effective APR
About 391% on a 14-day $500 loan at the maximum fee.
Term
Up to 45 days.
Installment plan
A right, on request, before the due date. No fees. 90 days minimum under $400; 180 days above.
Right to cancel
One day.
Rollovers
Not permitted. A lender may not refinance you into a new loan to clear an old one.
Criminal threats
Prohibited. Washington law bars criminal action against borrowers for non-payment.
Collections
Payday lenders collecting their own debts are subject to the state’s collection agency practices act.
Online lenders
Must hold a Washington licence. Verify at dfi.wa.gov.
Regulator
Department of Financial Institutions · 1-877-746-4334
Statute
RCW 31.45 — Check Cashers and Sellers Act

If money is being taken from your account

You can revoke authorisation and instruct your bank to stop the payment, whatever your agreement says.

What Regulation E says about automatic payments →

Every figure carries the jurisdiction and the exact provision it came from. Click to open the source.

Debt-collection law in Washington

A payday loan is a consumer debt. If it goes unpaid, two Washington 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 →

Sources. Washington State Department of Financial Institutions, payday loan consumer information and Borrower Rights and Responsibilities. DFI press release on ESHB 1709 (Chapter 510, Laws of 2009). DFI 2023 Payday Lending Report. RCW 31.45.
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