Vermont Payday Loans 

Vermont bans payday loan

Vermont does not allow payday loans. 2001 was the year that the first law was passed. Vermont is known for having the 2012 “strongest” law regarding payday loans. This law effectively banned all retail lenders from Vermont. All licensed lenders must adhere to the 18% loan limit. Illegal lending is currently forbidden.

Vermont Payday Lending Statutes

The FDIC prohibits Lending Institutions to keep any deposits later. Cash withdrawals or cash advances on postdated checks are not allowed.

Vermont requires that lenders register with the Department of Financial Regulation. Lenders must fulfill a strict set of requirements to be licensed to do business in Vermont. They must have a $50,000 surety bond and no less than $25,000 in liquid assets to cover their expenses. 

The Department of Financial Regulation scans each application, and a decision is made based on that criteria. It can be difficult to obtain a license for Vermont.

It passed in 2012 the most restrictive legislation. It made illegal unlicensed lending illegal and prohibited all assistance.

This ban makes it extremely difficult to obtain a payday loan in Vermont. Vermont does not have any payday loan shops.

But Vermont’s laws are weak and allow lenders to take advantage of loopholes. Payday loan providers over the Internet have been rescinded in Vermont. Many companies in the United States offer payday cash advances. This practice has been stopped by new legislation in the state.

There are several ways to circumvent the laws that ban payday cash advance lenders in some states. A charter can be purchased from a bank to allow the lender to borrow interest rates or terms from other states. Lending companies can get charters from banks in Vermont.

Despite being based in Vermont, the bank’s headquarters is in another state. They partner with them and purchase a charter to open Vermont branches. They will typically use high-interest rate banks to get their payday cash advance loans. Charters between lending companies and banks are allowed under Vermont law.

Fees, Rates, and Other Charges in Vermont

  • Depending on the type of loan, Vermont’s interest rate is 12-24% ARP.
  • Title 8 regulates the maximum interest rate lenders can charge for “single-payment loans”. It is 18% APR. (9 V.S.A. SS 41a
  • This is a misdemeanor. A 0 fine or 6-month imprisonment could be imposed along with other penalties. (9 V.S.A. SS 50(c).

Consumer Information

  • Collection of debts for an illegal Loan and a violation of Vermont Law.

The Vermont Banking Division provides more information on Vermont’s laws regarding payday loans.

The Department of Financial Regulation supervises state-issued lenders. If you believe that a lender uses indecent practices, you can file a complaint.

The number of Vermont residents who have filed complaints about a topic

According to CFPB Consumer Complaint Database

  • Fraud and Threat ( 7
  • Account fees (3 )
  • Lender not available (2

The History of Payday Loans in Vermont

  • 2001 – Vermont bans payday loans within its state (8 V.S.A. SS 2519(a), 13
  • May 2012, Vermont’s legislature used consumer protection laws to payday loan applications. This was the first time this had been done. The Vermont Consumer Protection Act made illegal lender and their agents directly liable. 9 V.S.A. SS 2481w.
  • It declared unlicensed lending “unfair and deceptive” and called it a direct violation of the Consumer Protection Act.
  • It also made illegal any financial processing done by unauthorized lenders. (9 V.S.A. SS 2481w(c).
  • Finally, any “substantial aid” given to unlicensed lenders will be considered a violation under the Consumer Protection Act.


bank account
interest rate
cash advance lenders
payday lending
credit score
loans in Vermont
high interest rates
loan amount
Vermont payday
state of Vermont
payday lenders
annual percentage rate
business day
cash advances
Loans Writer at | Website

Brycen Schinner works as an editor of personal finance. He holds an English literature degree from the University of Colorado Boulder. In the past as a lead editor at eBay as well as a manager of the writer's team that wrote about eBay's content team across the globe. He also wrote for Yahoo. After joining in 2013, He has covered subjects that range from personal loans and managing debt.