Payday Loans and Cash Advance in Iowa
Legal, $500 cap, 31-day term. Below: the law, the limits, what $300 costs here, who regulates it, and how to request a cash advance online in Iowa.
Legal in Iowa. Max amount: $500 combined face value of checks held by one licensee, and no more than two checks at a time (Iowa Code 533D.10). Max fee: $15 on the first $100 of the check's face amount and $10 on each additional $100, prorated (Iowa Code 533D.9). A $300 loan for 14 days costs about $35 (304% APR). Regulator: Iowa Division of Banking, 515-281-4014.
Is a Cash Advance Legal in Iowa?
Payday loans are legal in Iowa, where the law calls them delayed deposit services. Chapter 533D of the Iowa Code requires a license from the Iowa Division of Banking and sets the terms: a lender may hold no more than two of your checks at a time, with a combined face value of no more than $500, for no more than 31 days. The fee is capped at $15 on the first $100 of the check's face amount and $10 on each additional $100, prorated for partial amounts, and the lender must give you a written notice of the fee and the APR at the time of the transaction. Rolling one loan into another from the same licensee is prohibited, and no charges beyond the statutory fee are allowed. On a two-week loan the capped fee works out to roughly 300 percent APR, lower than in many neighboring states but still a very expensive way to borrow. The Division of Banking licenses, examines and takes complaints against delayed deposit lenders, and its online complaint form is the route if a lender breaks these rules. Iowa has no statewide database, so the two-check limit applies to each lender separately.
The governing law is Iowa Code Chapter 533D (Delayed Deposit Services) (Iowa Code 533D.3, 533D.9 and 533D.10).
Loan Limits and Terms in Iowa
| Rule | IA |
|---|---|
| Maximum amount | $500 combined face value of checks held by one licensee, and no more than two checks at a time (Iowa Code 533D.10) |
| Maximum term | 31 days (Iowa Code 533D.10) |
| Minimum term | No statutory minimum |
| Maximum fee per $100 | $15 on the first $100 of the check's face amount and $10 on each additional $100, prorated (Iowa Code 533D.9) |
| APR on a $300, 14-day loan | About 304% on $300 cash at $35 in fees over 14 days |
| Rollovers | Not allowed; a check transaction cannot be repaid, refinanced or consolidated with another from the same licensee (Iowa Code 533D.10) |
| Cooling-off period | None |
| Statewide database | No statewide database |
Iowa measures the fee against the face amount of the check, which includes the fee itself, so the ceiling is slightly higher than a simple fee-on-cash calculation suggests: $15 for the first $100 and $10 for every $100 after that, prorated. The $500 limit and the two-check limit apply to what one licensee holds from you, not across lenders, and with no database a borrower can end up with several lenders at once. The 31-day maximum is the longest a lender may hold your check; it must present it or hand it back by then. What Iowa does not have is a renewal mechanism: a licensee cannot refinance your check with a new one, and it cannot make you pay by a method that costs you extra. If the check bounces, the licensee's only remedy is a single penalty of no more than $15, charged once no matter how long the check stays unpaid.
What a $300 Loan Costs in Iowa
| Amount | Term | Fee | You repay | APR |
|---|---|---|---|---|
| $300 | 14 days | $35 | $335 | 304% |
Iowa Code 533D.9 caps the fee at $15 on the first $100 and $10 on each additional $100 of the check's face amount. Counted on the $300 you receive, that is $15 + $10 + $10 = $35, and you write a check for $335. APR: $35 / $300 = 0.1167; 0.1167 x 365 / 14 = 3.04, or about 304 percent. Because the statute measures the fee against the face amount, which includes the fee, a lender can lawfully charge a little more, about $38.89 on $300, which is roughly 338 percent APR.
Run your own numbers with the cash advance calculator.
Consumer Protections and Who to Call in Iowa
- Delayed deposit lenders must be licensed by the Iowa Division of Banking under Iowa Code 533D.3 and display the license; the Division examines licensees and handles complaints through its online form.
- The fee is capped at $15 on the first $100 and $10 on each additional $100 of the check's face amount, and the licensee may not collect any other charge or fee beyond those listed in section 533D.9 (Iowa Code 533D.9 and 533D.10).
- At the time of the transaction the licensee must give you a written notice in clear language stating the fee, the annual percentage rate and the date the check will be deposited (Iowa Code 533D.9).
- A licensee may not hold more than two of your checks at once, more than $500 in total, or any check for longer than 31 days (Iowa Code 533D.10).
- A licensee may not repay, refinance or consolidate your check with the proceeds of another delayed deposit transaction, which rules out rollovers from the same company (Iowa Code 533D.10).
- If your check is not good on the agreed date, the licensee may charge one penalty of no more than $15, collected once per check, and that penalty is its exclusive remedy under the chapter (Iowa Code 533D.9).
- Federal law caps the annual rate at 36 percent, including most fees, for active-duty service members and their dependents under the Military Lending Act.
Complaints and licence checks go to the Iowa Division of Banking: 515-281-4014, idob.iowa.gov, or file a complaint at the regulator's complaint page. The federal CFPB also takes complaints about any lender.
Online vs Storefront Lenders in Iowa
Iowa's delayed deposit law is built around a paper or electronic check held by a licensee, and the licensing requirement in chapter 533D applies to anyone providing that service to Iowa residents, online or in person. The Division of Banking's complaint process asks you to confirm the company is one it regulates, using its search tool or NMLS Consumer Access, before filing. Internet lenders without an Iowa license, including tribal-affiliated and offshore operators, do advertise to Iowans and typically charge far more than the $15 and $10 per $100 schedule while renewing loans automatically, something an Iowa licensee cannot do. The Division has limited power over a company that never applied for a license, so the most effective protection is to check the license before borrowing. Read the required fee and APR notice, confirm the check or debit amount matches the schedule, and keep copies. If a lender you cannot find on the Division's list is collecting from you, file with the Division anyway and with the Consumer Financial Protection Bureau, and ask your bank about stopping the debits.
Alternatives If a Payday Loan Is Not the Right Fit
Federal credit unions may offer payday alternative loans under NCUA rules: $200 to $1,000 over one to six months, or up to $2,000 over up to twelve months, capped at 28 percent APR with an application fee of no more than $20 and no rollovers. On $300 for a month that is a few dollars of interest instead of the $35 delayed deposit fee. Iowa also licenses regulated loan companies and industrial loan lenders under other chapters supervised by the Division of Banking; those loans repay in installments over a longer term, and the Division's licensee search will show whether a company holds that license. Compare the APR on the federal Truth in Lending disclosure, because a longer loan at a high rate can cost more than a short one. Ask your employer about an advance on wages already earned, ask the utility, landlord or medical provider for a payment plan, and call 2-1-1 Iowa for referrals to local emergency assistance before you write a check to a payday lender.
Compare the installment loan and payday alternative loan options before you decide.
Frequently Asked Questions
Are payday loans legal in Iowa?
Yes. Iowa calls them delayed deposit services and regulates them under Iowa Code chapter 533D. Licensed lenders may hold up to two of your checks totaling no more than $500 for up to 31 days, charging at most $15 on the first $100 and $10 per additional $100 of the check's face amount. Rollovers from the same lender are prohibited, and the Iowa Division of Banking licenses and examines the lenders.
How much does a payday loan cost in Iowa?
The fee is capped by Iowa Code 533D.9 at $15 on the first $100 and $10 on each additional $100 of the check's face amount. On $300 in cash that is about $35, or roughly 304 percent APR over 14 days; measured strictly on the face amount the ceiling is closer to $39. The lender must give you a written notice showing the fee and the APR at the time of the transaction.
How long can a payday lender hold my check in Iowa?
No longer than 31 days. Iowa Code 533D.10 bars a licensee from holding, or agreeing to hold, a check for more than 31 days, and from holding more than two checks or more than $500 from one person at a time. The lender cannot extend the loan by refinancing your check with a new transaction, so the due date is the real end of the loan.
Can I roll over a payday loan in Iowa?
Not with the same lender. Iowa Code 533D.10 prohibits a licensee from repaying, refinancing or consolidating a postdated check transaction with the proceeds of another one it makes. Iowa has no statewide database, so the law does not stop you from borrowing from a second lender, but each lender is still limited to two checks and $500 from you. Borrowing from several at once is how the cost multiplies.
How do I complain about a payday lender in Iowa?
Use the Iowa Division of Banking's online complaint form or call 515-281-4014. The Division asks you to try the business first, confirm it regulates the company through its search tool or NMLS Consumer Access, then submit the form; the lender has 10 to 20 business days to respond before an analyst contacts you. Keep your agreement, the fee notice and bank records to attach.
Nearby States
MinnesotaThe fee cap, a worked example and the regulator to call in Minnesota.
WisconsinThe fee cap, a worked example and the regulator to call in Wisconsin.
IllinoisThe fee cap, a worked example and the regulator to call in Illinois.
MissouriThe fee cap, a worked example and the regulator to call in Missouri.
NebraskaThe fee cap, a worked example and the regulator to call in Nebraska.
South DakotaThe fee cap, a worked example and the regulator to call in South Dakota.
