What Are the Maximum Loan Amount in Maine?
Maine has no set limit to a maximum loan amount, but $2,000 is considered the maximum amount recommended.
How Maine Regulates Fees and Other Charges in the State?
The rate cap in Maine is relatively small. Loans of less than $2000 are not permitted to carry rates greater than 30% APR. The law reads as follows:
As it pertains to consumer loans, outside of loans pursuant to open-end credit, all licensed lenders are allowed to contract and receive finance charges, as long as they are no more than:
- 30% each year on any balances remaining unpaid for amounts financed for values under $2,000; and;
- 24% each year on any balances remaining unpaid for amounts of greater than $2,000 but less than $4,000; and
- 18% each year on balances remaining unpaid for amounts that are over $4,000 (Me. Rev. Stat. Ann. tit 9-A §1-401).
It is also possible that lenders in Maine apply minimum finance charges rather than following the above-noted schedule. Any loan up to $50 will be charged more than $5; loans between $75 and $250 will be charged more than $15, and loans greater than $250 will be charged more than $25. On the whole, these fees are relatively reasonable and may help borrowers avoid getting caught in the web of constantly borrowing. (9-A MRS sec. 2-401(7))
Maine payday loans can have an APR as high as 217% for the average $300 loan (According to the Center for Responsible Lending 2019).
How Is the APR Calculated For a $300 Payday Loan in Maine?
If the term is 14 days
Interest Rate (APR): 217%*
Loan Cost: $300*217%*(14/365)=$25
To Return: Principal+Loan Cost=$300+$25=325
Is There a Specified Maximum Term in Maine?
There is no mention in Maine payday loan regulations of specific loan terms, including rollovers. Also, there is no mention of cooling-off periods between loans. Extended repayment plans are not required as well.
Since July 2020, as permitted by the Consumer Financial Protection Bureau (CFPB), lenders are no longer required to verify if a borrower can repay the loan. Before taking out payday loans, access your current financial situation to see if you have the ability to meet your financial obligations. Default payment penalties can throw you into a never-ending cycle of debts.
- Any criminal actions against borrowers are forbidden in Maine
Contact the Maine Office of Consumer Credit Regulation if you have any questions or concerns about payday loans.