Payday Loans and Cash Advance in Connecticut

Prohibited, 36% small loan cap. Below: the law, the limits, what $300 costs here, who regulates it, and how to request a cash advance online in Connecticut.

Is a Cash Advance Legal in Connecticut?

Payday loans are not legal in Connecticut. The state has no payday lending statute and the Department of Banking does not issue payday licenses. Instead, any loan of $50,000 or less with an APR above 12% is a small loan under Conn. Gen. Stat. 36a-555, and only a bank, credit union, or Department of Banking small loan licensee may make one. Section 36a-558 caps the APR on a small loan under $5,000 at the lesser of 36% or the Military Lending Act rate, and at 25% for loans between $5,000 and $50,000, with every fee the borrower pays counted in that APR. A loan made in violation of those rules is void, and no one may collect the principal, interest, or any charge on it. The general usury ceiling in Conn. Gen. Stat. 37-4 stays at 12% for everyone who is not exempt. The Department treats payday loan companies as unlicensed small loan lenders and tells consumers that their loans are void and unenforceable unless made by an exempt lender. In practice a Connecticut resident who needs a few hundred dollars can get a licensed small loan at up to 36% APR or a credit union alternative, but not a two-week loan at payday prices, from a storefront or a website.

The governing law is Connecticut Small Loan Lending and Related Activities Act; general usury statute (Conn. Gen. Stat. 36a-555 to 36a-573 (APR caps at 36a-558); Conn. Gen. Stat. 37-4).

Loan Limits and Terms in Connecticut

Connecticut regulates by rate rather than by product. Anyone lending $50,000 or less at more than 12% APR to a Connecticut resident is making a small loan and needs a Department of Banking license unless it is a bank or credit union. A licensee can charge up to 36% APR on loans under $5,000, and the statute folds every fee, voluntary or not, into that APR so a lender cannot get around the cap with add-on charges. The Act also bans balloon payments, negative amortization, prepayment penalties, and rate increases on default, and limits late fees to 5% of the installment or $25 a month and returned payment fees to $20. A payday loan cannot fit inside those numbers, which is why none are licensed. Loans that break the rules are void and uncollectible unless the violation was a bona fide error or the loan was lawfully made in another state.

What a $300 Loan Costs in Connecticut

Connecticut has no legal payday loan, so this shows the most a licensed small loan lender may charge on a loan under $5,000, which is 36% APR with all fees included under Conn. Gen. Stat. 36a-558. Interest for 14 days is 300 x 0.36 x 14 / 365 = $4.14, total repayment $304.14. APR = 4.14 / 300 x 365 / 14 = 0.36, or 36%. A lender without a license or exemption is limited to 12% under Conn. Gen. Stat. 37-4, which would be $1.38 on the same loan.

Run your own numbers with the cash advance calculator.

Consumer Protections and Who to Call in Connecticut

• Any lender making loans of $50,000 or less at more than 12% APR to Connecticut residents must hold a small loan license from the Department of Banking unless it is a bank or credit union, and you can verify a license through NMLS Consumer Access.
• The APR on a licensed small loan under $5,000 cannot exceed the lesser of 36% or the Military Lending Act rate, and every fee the borrower pays in connection with the loan is counted in that APR.
• A small loan made in violation of the Act is void, and no person has the right to collect or receive any principal, interest, charge, or other consideration on it, unless the violation was a bona fide error or the loan was lawfully made in another state.
• Small loans may not carry balloon payments, negative amortization, prepayment penalties, adjustable rates, or rate increases triggered by a missed payment, and late fees are capped at 5% of the installment or $25 a month.
• The Department of Banking treats payday lenders as unlicensed small loan lenders, accepts complaints about them by phone at 860-240-8170 or 800-831-7225 option 2 and by email at [email protected], and asks borrowers to send the signed agreement and proof of payments.
• Connecticut law bars the assignment of wages as security for a loan under Conn. Gen. Stat. 36a-568, which removes one of the tools payday lenders use elsewhere to guarantee repayment.
• Unlicensed lead generators are prohibited from facilitating small loans with unlicensed lenders, using robocalls without consent, or contacting consumers who have opted out, under the same statute.

Complaints and licence checks go to the Connecticut Department of Banking, Consumer Affairs Division: 860-240-8170, portal.ct.gov/dob, or file a complaint at the regulator's complaint page. The federal CFPB also takes complaints about any lender.

Online vs Storefront Lenders in Connecticut

Connecticut has no payday storefronts because the Department of Banking does not license the product. The exposure is online, where out-of-state and tribal lenders advertise two-week and short-term installment loans at payday rates to Connecticut residents. The Department's position is that these companies are unlicensed small loan lenders and that Connecticut law treats their loans as void and unenforceable unless the lender is a bank, credit union, or Department of Banking small loan licensee. In 2023 the Department issued guidance confirming that the Small Loan Act reaches the true lender behind a loan, including companies that use a bank partner or an earned wage access model, and the statute now also covers lead generators that steer residents to unlicensed lenders. The Department asks anyone dealing with an online payday lender to file a complaint with the signed agreement, the company's address and phone number, proof of payments such as bank statements, and a note on how the company found them. Complaints go to [email protected] or the online form, and the Department also points borrowers to the Consumer Financial Protection Bureau at 855-411-2372. Before borrowing from any website, check the lender on NMLS Consumer Access.

Alternatives If a Payday Loan Is Not the Right Fit

The legal small-dollar product in Connecticut is a small loan from a Department of Banking licensee, capped at 36% APR with all fees included for amounts under $5,000 and 25% for larger amounts, repaid in installments with no balloon payment. Banks and credit unions are exempt from the license and can lend on their own terms within the state's usury law. Federal credit unions may offer payday alternative loans of $200 to $2,000 at no more than 28% APR under National Credit Union Administration rules, and many Connecticut credit unions run small emergency loan programs for members. Connecticut passed a law in 2025 regulating earned wage access, so an advance on wages already earned through an employer program is an option that is now licensed and supervised. For a utility, rent, or food emergency, 211 Connecticut and local community action agencies connect residents to assistance that does not have to be repaid, and Operation Fuel helps with energy bills. A hardship arrangement with the creditor you owe is usually free, and a credit card cash advance, while not cheap, is far below payday pricing.

Compare the installment loan and payday alternative loan options before you decide.

Frequently Asked Questions

Nearby States

• MassachusettsThe fee cap, a worked example and the regulator to call in Massachusetts.
• Rhode IslandThe fee cap, a worked example and the regulator to call in Rhode Island.
• New YorkThe fee cap, a worked example and the regulator to call in New York.