Washington State caps a payday loan at $700 or 30 percent of your gross monthly income, whichever is lower, and the fee on a maximum loan cannot legally top $95. Both numbers come straight from RCW 31.45.073 (RCW is the Revised Code of Washington, the state's compiled statutes), part of the Check Cashers and Sellers Act, and they bind every licensed lender, storefront or online. The payday loan rules in Washington State go further than that, though: eight loans per 12 months, tracked in a statewide database, a free installment plan you can demand by name, and a flat rule that an unlicensed lender cannot collect a dime from you. This guide walks through each protection, the statute or regulator behind it, and the practical step to take when a lender crosses a line.
Washington Payday Loan Laws: What a Lender Can Legally Charge
Every dollar limit in this section sits in RCW 31.45.073, which you can read for yourself. The statute calls these products "small loans," so that's the term you'll see if you pull up the text. The Washington State Department of Financial Institutions (DFI) licenses the lenders who make them and examines their books.
The $700 cap, or 30 percent of your gross monthly income
No borrower in Washington may owe more than $700 in payday loan principal at any one time, counted across all licensed lenders combined. If 30 percent of your gross monthly income (your pay before taxes) works out lower than $700, that lower figure becomes your personal ceiling. Someone grossing $2,000 a month can borrow at most $600, no matter what a lender offers.
Because the cap is aggregate, splitting your borrowing between two or three companies changes nothing. A lender has to check your total outstanding principal before funding you, which is where the state's database comes in. More on that shortly.
The tiered fee: 15 percent on the first $500, 10 percent above it
Washington doesn't cap payday cost as an interest rate. It caps the fee itself, in two tiers: 15 percent on the first $500 of principal, then 10 percent on anything between $500 and $700. Worked out on the two most common ceilings:
- Borrow $500: the maximum fee is $75, which is 15 percent of $500. You repay $575 in total.
- Borrow $700: the maximum fee is $95, made up of $75 on the first $500 plus $20, which is 10 percent of the remaining $200. You repay $795 in total.
DFI prints those exact examples, $575 and $795, in its own annual report. A lender quoting you more isn't operating in a gray area; the quote exceeds the statutory cap. Watch the second tier, too, because at least one law-summary site describes Washington's cap as a flat 15 percent of the whole loan, which overstates what a lender may charge on any principal above $500.
Terms have a ceiling of their own. A Washington payday loan runs at most 45 days, weekends and holidays included, unless you and the lender agree to extend it and no extra fee or interest changes hands. Your due date must fall on or after your next payday, or your second payday if the first one lands within seven days of the loan date.
What the fee means as an APR
Flat fees hide the real price, so translate them. The formula: fee divided by principal, times 365, divided by the term in days, times 100.
- A $700 loan carrying the full $95 fee and due in 14 days works out to a 353.8 percent APR.
- That same loan stretched over the full 45-day term drops to a 110.1 percent APR.
- A $500 loan with a $75 fee at 14 days is a 391.1 percent APR, the classic national payday figure, because 15 percent on $500 is exactly $15 per $100.
Real pricing in the state runs close to the ceiling. DFI's 2024 Payday Lending Report, covering calendar year 2024, recorded a $135 million market: $135,255,546 lent across 286,993 loans, an average loan of $471.29, an average fee of $59.37, and an average initial term of 41.5 days. Run those averages through the formula and the typical Washington payday loan in 2024 worked out to roughly a 111 percent APR. Expensive by any ordinary measure, and still a fraction of what borrowers pay where no fee cap exists. If the mechanics still feel backwards, the deeper breakdown of why a flat fee turns into a triple-digit APR walks through the same formula with national numbers.
The Washington State Payday Loan Limit: An 8-Loan Cap and the Database Behind It
Washington restricts every borrower to eight payday loans in any 12-month period, counted across all lenders. This rule, more than the fee tiers, is what separates Washington from most states that still allow payday lending, because it caps your year rather than just your loan.
Enforcement doesn't run on the honor system. Under RCW 31.45.093, every licensed lender must query a statewide eligibility database before funding a loan, and that system (operated by a vendor called Catalis, formerly Veritec) reports your outstanding principal, your loan count over the past 12 months, and whether you're currently on an installment plan. Walking into a second storefront resets nothing. Applying on a second website resets nothing either. The ninth application gets declined regardless of who takes it.
The limit bites in practice. During calendar year 2024, 11,983 of Washington's 92,032 payday borrowers, right at 13 percent, hit the eight-loan ceiling, according to DFI's report. And the structure produces a number worth pausing on: a borrower who takes all eight loans at the $700 maximum pays at most $760 in fees for the entire year, since $95 times eight is $760. That derived ceiling on annual cost simply does not exist in states without a loan count.
Your Rights as a Washington Borrower
Each protection below is one you can invoke by name. Lenders already know them. The point is that you should too.
The free installment plan you can demand
If you can't repay on the due date, say so. Under RCW 31.45.084, a borrower who tells the lender they cannot pay on time is entitled to convert the loan into an installment plan: at least 90 days to repay a loan of $400 or less, at least 180 days for anything over $400. The lender may not add any fee, interest, or other charge for the conversion, and you can pay the plan off early without penalty. Get the plan in writing, because the statute requires a written agreement and a verbal promise protects nobody.
DFI states you're entitled to the plan at any time prior to default. In practice, asking early is the smart move: Moneytree, one of the state's licensed lenders, tells its Washington customers in its published FAQ that a plan must be requested before the deposit time on the day the loan is due. That cutoff is one lender's operating practice, not the law, but it points at the right habit. Raise your hand before the due date, not after your check has already bounced.
One trade-off comes with the conversion. While you're on an installment plan, the database flags your status and you can't take a new payday loan until the plan is paid off, per DFI's consumer guidance. Borrowers used the right heavily anyway: 24,045 loans converted to installment plans in 2024, about 8.4 percent of every loan made that year.
One business day to cancel for free
Washington gives you a right of rescission, meaning a no-cost cancellation window. You can cancel the loan on or before the close of business on the next day of business, at the location that originated it, by returning the principal in cash or handing back the lender's original funding check. RCW 31.45.086 requires the lender to disclose this right conspicuously in your loan agreement, so check the paperwork; the clause should be hard to miss.
Extensions exist, paid rollovers do not
A rollover, where you pay a fresh fee to push the due date back, is the engine of payday debt in most of the country. Washington bans the paid version outright. A lender can agree to extend your due date beyond the 45-day maximum, but only if no additional fee or interest is charged for the extension, per RCW 31.45.073. DFI's consumer guidance adds that a lender cannot issue you a new payday loan to pay off an existing loan from the same lender or its affiliate. When repayment is genuinely out of reach, the installment plan above is the exit the legislature built, and it costs nothing. For borrowers already several loans deep before finding this page, a step-by-step exit plan from payday debt covers the tactics that work once the installment plan alone isn't enough.
Collection lines a lender cannot cross
According to DFI's consumer page, a payday lender collecting in Washington may not harass you and may not threaten criminal prosecution to pressure you into paying. "Pay today or we'll have you arrested" is a violation you can report, not a threat you should lose sleep over. Save the voicemail or message where a collector says it, because documentation is what turns your complaint into an enforcement file.
Unlicensed Lenders Cannot Collect From You
Here is the strongest sentence in Washington's payday law, and the one almost nobody knows. Under RCW 31.45.105, a small loan made to a person physically located in Washington by a lender without a Washington small loan endorsement is uncollectible and unenforceable. The statute covers loans made over the internet or by phone explicitly. An offshore website or an out-of-state operation that never obtained a Washington license holds no legal claim to repayment.
Check the license before you borrow, every single time. DFI runs a free lookup, and you can also call 1-877-RING-DFI (746-4334). The legitimate field is small and easy to confirm: just 11 licensed payday companies operated 33 locations statewide in 2024, with locations down 96 percent from their 2006 peak, per DFI's report.
One line for military readers: the federal Military Lending Act caps the APR on consumer credit to active-duty servicemembers and their dependents at 36 percent, well below what Washington's fee tiers produce on a short term, and DFI's 2024 report shows exactly one military borrower took a payday loan in the state that year.
How Washington Compares
The Consumer Financial Protection Bureau (CFPB) puts typical storefront payday fees nationally at $10 to $20 per $100 borrowed, and notes that $15 per $100 on a two-week loan equals a 391 percent APR. On the first $500, Washington sits exactly at that national midpoint of $15 per $100. What makes the state strict is everything wrapped around the fee: a database-enforced eight-loan year, a term that can run 45 days instead of 14, extensions that must be free, and an installment plan any borrower can demand at no charge. Texas shows the other extreme, where credit access businesses broker loans outside the state's fee caps and effective APRs can run past 600 percent. Florida caps its fee lower than Washington, at 10 percent, but relies on a 60-day grace period rather than an annual loan count.
How to File a Complaint With DFI
If a lender charges above the tiered caps, refuses a lawful installment plan request, threatens you during collection, or turns out to be unlicensed, DFI's Division of Consumer Services is your enforcement channel. Four steps:
- Gather your loan agreement, payment receipts, and any messages or voicemails from the lender or its collectors.
- Run the lender through DFI's license lookup first. Unlicensed lending changes your situation entirely, because the loan itself becomes unenforceable under RCW 31.45.105.
- File the complaint. The online form is the fastest route, and you can print and mail or fax the same form if you prefer paper.
- Keep copies of everything you submit. DFI examines its licensees and can act against lenders who violate the Check Cashers and Sellers Act, and your file may be the record that triggers a look.
Complaints do more than settle your own dispute. The 2024 report exists because the state watches this market loan by loan, and borrower complaints tell the examiners where to point.
Frequently Asked Questions
How many payday loans can you have at once in Washington state?
State law caps the total rather than the count: everything you owe across all licensed lenders may not exceed $700 or 30 percent of your gross monthly income, whichever is lower. Separately, RCW 31.45.073 limits you to eight payday loans in any 12-month period, enforced through a statewide lender database.
What is the maximum payday loan amount in Washington state?
The maximum is $700, or 30 percent of your gross monthly income if that figure is lower, counted across all lenders combined under RCW 31.45.073. Every licensed lender must check the state's eligibility database before funding you, so borrowing from several companies cannot push your total principal past the cap.
Can a payday lender charge more than $95 in Washington?
Not on a single loan. Washington's fee cap runs 15 percent on the first $500 of principal and 10 percent on the portion above it, which only reaches $95 on a maximum $700 loan. A lender charging beyond those tiers is violating RCW 31.45.073, and DFI accepts complaints about exactly that.
What happens if I can't pay my payday loan back in Washington?
Tell the lender before you default. Washington law entitles you to convert the loan into an installment plan at no added fee: at least 90 days to repay a loan of $400 or less, at least 180 days for anything larger. DFI states the right applies at any time prior to default.
Are online payday loans legal in Washington state?
Yes, but only from lenders holding a Washington small loan endorsement, and every state cap still applies: $700 maximum, tiered fees, eight loans per year. A loan made to a Washington resident by an unlicensed online lender is uncollectible and unenforceable under RCW 31.45.105. Verify the license with DFI before applying.
Can a payday lender in Washington threaten me with arrest?
No. DFI's consumer guidance says a payday lender may not threaten criminal prosecution to collect an unpaid loan and may not harass you. Save any message or voicemail carrying the threat, then file a complaint with DFI's Division of Consumer Services, since documented threats give the regulator something concrete to act on.
