Payday Loans Ohio: 28% APR Cap, 91-Day Minimum
Short-term lending in Ohio is legal but tightly structured under the Fairness in Lending Act — House Bill 123 that took effect in April 2019. The law caps individual loans at $1,000 with a 28% annual percentage rate ceiling, requires a minimum 91-day loan term, and prohibits rollovers. Ohio's Division of Financial Institutions licenses all short-term lenders and enforces a statewide database system to prevent borrowers from exceeding $2,500 in total outstanding short-term loan balances. The 91-day minimum effectively converted Ohio's traditional payday loan market into an installment loan market.
Ohio Short-Term Loan Regulations at a Glance
- Status: Legal under the Ohio Fairness in Lending Act (H.B. 123)
- Maximum loan amount: $1,000; total outstanding cap: $2,500
- Maximum APR: 28%
- Monthly maintenance fee: lesser of 10% of principal or $30
- Origination fee: up to 2% (loans $500+)
- Total cost cap: 60% of original principal (all fees + interest)
- Minimum term: 91 days; maximum: 12 months
- Rollovers: Prohibited
- One loan at a time; statewide database enforces $2,500 outstanding cap
- Regulator: Ohio Department of Commerce, Division of Financial Institutions
How Ohio's Fairness in Lending Act Changed Everything
Before April 2019, Ohio had one of the most permissive payday loan environments in the country. Lenders operated under multiple overlapping licensing regimes with minimal fee restrictions, and two-week rollover cycles were standard. Ohio borrowers were paying effective APRs that routinely exceeded 600%. H.B. 123, signed into law in 2018 as the Ohio Fairness in Lending Act, wiped that structure out.
The reform did three things that fundamentally restructured the market. First, it collapsed all short-term lending licenses into a single Short-Term Loan Law license administered by Ohio DFI. Second, it capped APR at 28% and layered on a total-cost ceiling (60% of principal) to prevent fee manipulation. Third — and most consequentially — it established a 91-day minimum loan term, making traditional two-week payday loans structurally impossible. Ohio lenders responded by pivoting to installment products: 3-to-6 month loans with bi-weekly payments rather than lump-sum repayment.
Ohio Fee Structure: What a $500 Loan Actually Costs
The 60% total cost cap is the binding constraint for most Ohio loans — all fees and interest combined cannot exceed 60% of the original principal, regardless of the term length.
The 91-Day Minimum: Ohio's Most Consequential Rule
The 91-day minimum term is the rule that most distinguishes Ohio from other payday lending states. In states with two-week terms, borrowers who cannot repay face a binary choice: pay in full or roll over. Rolling over generates another fee and extends the debt cycle. Ohio eliminated that cycle by making it impossible for a loan to mature in less than three months.
The practical effect is that Ohio short-term loans look more like personal installment loans than payday products. You borrow $500, receive a payment schedule spanning 3 to 12 months, and make bi-weekly or monthly payments from your regular income. You don't repay the full balance on your next payday — you repay it gradually. For borrowers who genuinely need a bridge loan, this structure is more manageable. For lenders who relied on the rollover fee model, it required a complete business model pivot.
Some lenders left Ohio after H.B. 123 took effect. Others adapted. The Ohio market today is smaller in store count than the pre-2019 peak but more structured. DFI-licensed lenders operating in Ohio's major cities offer genuine installment products with payment schedules, not the rollover traps that characterized the pre-reform market.
Ohio Resources for Residents Needing Emergency Financial Help
- Ohio 2-1-1: Dial 2-1-1 or visit ohio211.org for statewide emergency assistance referrals covering all 88 counties — utilities, rent, food, healthcare, and financial counseling
- Ohio Benefits Bank: Free benefit enrollment assistance; counselors identify programs that may address the emergency without taking on debt
- Community Action Agencies: Each of Ohio's 88 counties has a Community Action Agency providing emergency cash assistance, utility help, and financial counseling for income-qualifying residents
- Ohio Credit Union League members: Ohio credit unions offer PAL (payday alternative loan) products with APRs capped well below the state's 28% payday ceiling
- Ohio Housing Finance Agency (OHFA): Emergency rental and utility assistance programs for housing-cost emergencies
Frequently Asked Questions About Payday Loans in Ohio
Are payday loans legal in Ohio?
Yes, with significant restrictions. Ohio authorizes short-term lending under the Fairness in Lending Act (H.B. 123), which replaced several overlapping licensing frameworks in April 2019. The law caps individual loans at $1,000, limits APR to 28%, requires a minimum 91-day term, and prohibits rollovers. Ohio's Division of Financial Institutions licenses all lenders and maintains a statewide loan database. Traditional two-week payday loans no longer exist in Ohio — the 91-day minimum transformed the market into installment-style products.
How much can I borrow with a short-term loan in Ohio?
Ohio caps any single loan at $1,000. Additionally, Ohio law limits your total outstanding short-term loan balances across all licensed lenders to $2,500. When you apply, lenders run a statewide database check to verify your current outstanding balance before issuing a new loan. If your total active balances are at or near $2,500, you will not qualify for additional borrowing until existing balances are paid down. There is no minimum loan amount specified by statute, though individual lenders set their own internal minimums.
What is the interest rate cap on Ohio short-term loans?
Ohio's Fairness in Lending Act sets a 28% annual percentage rate cap. In addition to interest, lenders may charge a monthly maintenance fee — the lesser of 10% of the loan principal or $30 per month — and an origination fee of up to 2% for loans of $500 or more. The law also caps the total cost of the loan (all interest plus all fees combined) at 60% of the original loan principal. That 60% total cost cap prevents fee stacking from dramatically exceeding the APR ceiling on shorter-term loans.
What is the minimum loan term in Ohio?
Ohio requires a minimum loan term of 91 days for all short-term loans. The maximum term is 12 months. The 91-day minimum was a deliberate design choice in H.B. 123 to prevent the rapid-cycle debt traps that characterized Ohio's pre-2019 payday loan market, where two-week rollovers were common. Most Ohio lenders now offer 3-to-12 month installment products with bi-weekly or monthly payment schedules that align with the borrower's pay cycle.
Who regulates short-term lenders in Ohio?
The Ohio Department of Commerce, Division of Financial Institutions (DFI), licenses and supervises all short-term lenders operating under the Fairness in Lending Act. Ohio DFI can be reached at 1-800-282-0515. You can verify any lender's license status through the Ohio DFI website at com.ohio.gov or through the NMLS Consumer Access portal. Operating as an unlicensed short-term lender in Ohio is a violation of state law. Only apply with DFI-licensed lenders.
What alternatives exist for Ohio residents who need emergency cash?
Ohio residents have several alternatives to licensed short-term lenders. Credit unions across Ohio offer payday alternative loans (PALs) with federally capped rates well below the 28% APR ceiling. Ohio's 2-1-1 helpline (dial 2-1-1 or visit ohio211.org) connects residents to emergency assistance programs covering utilities, rent, food, and healthcare across all 88 counties. Community Action Agencies in each county provide emergency cash assistance and financial counseling. Many Ohio employers offer earned wage access programs. Ohio Benefits Bank counselors can identify benefit programs that may address the underlying emergency.