by Ben Sweiry ·
Modified on 16 October, 2023
No, you cannot visit another state in order to get a payday loan. Lenders are only actually permitted to lend funds to people within the state they are licensed in.
However, if you are a temporary resident, you may be capable of obtaining a payday loan if they are legal in your home state. If you apply with someone like Dime Alley but payday loans are not legal in your state, you may be recommend a nation-wide lender who may be able to offer short term funds, including credit unions and banks.
Payday loans can be a good option if you need money for an emergency, or to tie you over until your next payday. However, you should bare in mind that not every state permits payday loans, and if payday lending is illegal in your state, you can’t just go to a different state or visiting an online lender to get a payday loan.
Key Points:
- Typically, you can’t take a loan out in another state. You need to abide by your state’s laws by taking out a loan in your own state.
- Payday loans are authorized in thirty-seven states, and are prohibited in thirteen.
- The different states have varying regulations surrounding loans, such as on how much interest can be applied, and maximum loan amounts, such as California’s loan cap of $300.
- Alternatively, you could consider a national product, such as a credit card or credit union, rather than a loan which has local regulations applied to it.
Can I Get a Payday Loan in Another State?
In the majority of cases the answer to this is no, you can’t get around payday loan laws by just going to a nearby state where they are legal.
Further, even if they are legal both in your home state and in the state you are entering, you will still be unable to take out a payday loan. This is because lenders are obligated to only lend to residents of the state that they operate in.
How Do States’ Regulations Differ?
Different states will apply different regulations to their loans. For instance, different states will have different caps on how much you can borrow. For instance, the maximum loan you can secure in California is $300. In Alabama, the maximum attainable loan is $500, while Texas bears no cap at all.
If lenders violate these rules, the Consumer Financial Protection Bureau will step in and protect regulations and consumers.
Can I Get a Loan If I’m Living In Another State Temporarily?
This question is more complicated, and really depends on the circumstances you find yourself in. For instance, if you are registered as a temporary citizen in a state where payday loans are legal, such as Nevada, and you are coming from a state where payday loans are also legal, like Texas, then there may be an option for you to take out a payday loan.
But, it is important to bear in mind that if you are living as a temporary resident in a state, a lender will probably need more documentation to confirm your address.
However, if the state you are currently living in does not legally permit payday lending schemes, it may not be possible to access funds from such lending companies.
You may also be restricted to using a selection of online lenders. You should always remember to consider another state’s laws which may be different than the regulations in your home state.
Have You Thought About National Products?
Even if your state does not permit you to take out a payday loan, there are national products that Dime Alley can offer you such as bank loans or credit cards. We are a connection service, so we will simply be able to recommend the next best product. You may not require a state specific product, but credit cards, for instance, are available to all.
What If Payday Loans Are Illegal In My State?
Although it can be frustrating if payday loans aren’t an option for you based on your residency, there are alternatives to payday loans which you might want to consider using, if payday loans are illegal in your state. These can include:
- Personal loans;
- Financial support schemes from your employer;
- Tribal lenders;
- Installment loans;
- Borrowing from family or close friends.
You might want to take a quick look at this guide about alternatives to payday loans where we go through these options in further detail.
What Will Happen If I Get a Payday Loan in an Illegal State?
If you are planning on taking out a payday loan, make sure to check whether it is a legal practise in your state. This includes checking the interest rates and fees, loan amount and loan terms to see if it is valid within your state’s legislation.
If you find out that the payday loan you took out was illegal, you may not need to pay it back. Whilst some states require you to pay back the agreed amount (including interest), in others you are only required to repay the principal. To find out this information, you will need to contact you state’s consumer protection office. They can advise about the legality of short-term lending in your state.
If you move to a different state after taking out a loan in another state, you will still be required to pay back the loan in full with the agreed interest rate, even if payday loans are illegal in your new state. If you do not pay this back, you are at risk of being sued by the payday loan company.