Virginia Sends a Signal to Payday Lenders
The Virginia Senate unanimously passed a bill Friday that that would fix a loop hole that was opened to payday lenders starting January 1st.
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Payday Loans in Virginia
Payday Loan Laws in Virginia (2026)
Virginia overhauled small-dollar lending in 2020. The Fairness in Lending Act (effective January 1, 2021) abolished the old payday loan and its 300%+ APRs, replacing it with a single short-term loan capped at 36% interest plus a limited monthly fee, for amounts up to $2,500 over 4–24 months. It also closed the loopholes lenders had used to dodge Virginia's rate cap.
| Status | Legal — reformed (the old payday loan was abolished in 2020) |
|---|---|
| Interest cap | 36% simple annual interest |
| Monthly fee | Maintenance fee: the lesser of $25 or 8% of the original loan |
| Maximum loan | $2,500 |
| Loan term | 4 to 24 months (installments) |
| Total-fee cap | 50% of the loan (≤$1,500) or 60% (over $1,500) |
| Rollovers | Not permitted — one short-term loan at a time |
| Database | Yes — lenders must check a state database before lending |
| Regulator | State Corporation Commission, Bureau of Financial Institutions |
| Law | Virginia Fairness in Lending Act of 2020 (Code of Virginia Title 6.2, Ch. 18) |
What Virginia's 2020 reform means for you
- The two-week, single-payment payday loan no longer exists in Virginia — it was replaced by a 4-to-24-month installment loan.
- Interest is capped at 36% a year, plus a small monthly maintenance fee (the lesser of $25 or 8%). The all-in cost is higher than 36% once the fee is counted, but far below the old payday rates.
- You can hold only one short-term loan at a time, checked against a state database, and there are no rollovers.
- Total fees are capped at 50% of the loan ($1,500 or less) or 60% (above $1,500).
Problem with a lender? File a complaint
Short-term lenders in Virginia are licensed by the SCC's Bureau of Financial Institutions. To report a violation or an illegal lender, use the online complaint form.
Alternatives to a payday loan
Even at 36%, compare a credit-union payday-alternative loan, an employer paycheck advance, or a payment plan with the biller first. See our guide to payday loans and alternatives.
Your debt rights in Virginia
A lender can garnish wages in Virginia only after it sues and wins a court judgment, and federal law then caps how much can be taken. Virginia operates a real-time payday-loan database, so state limits on how many loans you can hold at once are enforced across all lenders. Your rights when you cannot repay are set by a mix of federal and state law — these guides explain how they work:
- Can a payday lender sue you?
- Can payday loans garnish your wages?
- Do payday loans affect your credit?
- Payday loan statute of limitations
- How many payday loans can you have?
- How to get out of payday loan debt
Disclaimer: general information, not legal or financial advice. Laws change — verify the current rules with the Virginia State Corporation Commission (SCC), Bureau of Financial Institutions before borrowing. Last reviewed 2026.
Sources
Frequently asked
Are payday loans legal in Virginia?
The old payday loan was abolished by the 2020 Fairness in Lending Act. Short-term loans are still legal but are now capped at 36% interest plus a limited fee, up to $2,500 over 4–24 months.
What is Virginia's interest cap on short-term loans?
36% simple annual interest, plus a monthly maintenance fee of the lesser of $25 or 8% of the original loan. Total fees are also capped at 50–60% of the loan.
Can I still get a two-week payday loan in Virginia?
No. Since 2021, these loans must be installment loans of at least 4 months, capped at 36% interest — the single-payment payday loan is gone.
Who regulates short-term lending in Virginia?
The State Corporation Commission's Bureau of Financial Institutions.
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