Payday Loans in Ohio: Laws, Costs, and Your Options (2026)

Payday loans in Ohio are legal, but not in the form most people picture. Ohio’s 2018 reform, House Bill 123, rewrote the Short-Term Loan Act (Ohio Revised Code 1321.35 to 1321.48) and effectively ended the two-week, single-payment payday loan. What replaced it is a small installment loan: up to $1,000, repaid over at least 91 days in most cases, with interest, fees, and total cost all capped. This page covers what the law allows, what a loan costs in dollars, your rights before and after you sign, and which of the lenders we review serve Ohio. For how Ohio compares with every other state, see payday loan laws by state.

Ohio payday loan rules at a glance

Rule	Ohio
Legal status	Permitted, through a licensed short-term lender (Short-Term Loan Act, R.C. 1321.35 to 1321.48)
Regulator	Ohio Department of Commerce, Division of Financial Institutions, 614-728-8400
Maximum loan amount	$1,000 per loan; $2,500 total short-term principal outstanding across lenders (R.C. 1321.41)
Interest cap	28% a year (R.C. 1321.40)
Fees	Monthly maintenance fee of 10% of the loan or $30, whichever is less; origination up to 2% on $500 or more
Total cost cap	All interest and fees together capped at 60% of the original loan (R.C. 1321.403)
Term	91 days to 1 year; shorter only if the payment is at most 6% of gross or 7% of net monthly income
Right to cancel	Until 5 p.m. on the third business day after the loan is made (section 1321.39)
Returned payment	One charge per loan of up to $20, plus any amount passed on from other financial institutions (section 1321.40)
Military borrowers	Monthly maintenance fee waived; 36% federal MAPR cap under the Military Lending Act

How an Ohio short-term loan works

House Bill 123, effective October 29, 2018, set one set of rules for short-term loans of $1,000 or less. Today an Ohio short-term loan is repaid in installments over 91 days to one year. A shorter term is allowed only when the monthly payment is small relative to your income: no more than 6% of your gross monthly income, or 7% of your net (section 1321.39).

The lender may refinance a loan, but only at the 28% interest rate, with no new maintenance fee (section 1321.401). You can prepay at any time and get a pro-rated refund of charges you paid in advance (section 1321.402).

What a short-term loan costs in Ohio

Here is the math on a $500 loan repaid in three equal monthly installments over about 91 days, using the maximum charges the statute allows:

	Amount
Borrowed	$500
Origination fee (2%)	$10
Monthly maintenance fee ($30 × 3)	$90
Interest at 28% on a declining balance	About $23
Total charges	About $123
Most the law allows in charges (60%)	$300

These are our own illustration figures, not a quote; your Truth in Lending disclosure states the actual APR and total of payments. The monthly fee drives the cost, not the 28% rate: on a $500 loan it is $30 a month whatever the balance, so paying early is the lever that saves the most. For scale, the Division of Financial Institutions’ 2021 report counted 291,298 short-term loans to 144,394 Ohio borrowers, averaging $457, with an average contracted APR of 71%.

The 60% cap: the rule that ends the debt spiral

Section 1321.403 caps the total of all interest and fees on a short-term loan at 60% of the original loan amount. On a $1,000 loan that is $600, no matter how long repayment takes. Before 2018, repeated renewals could run the cost of a small loan well past the amount borrowed. Under the current law, once the charges reach 60% of the principal, the lender cannot add more.

Your rights at the counter

1. A licensed lender. Every rule on this page binds a licensed short-term lender. Check the license on the Department of Commerce eLicense lookup or call the Division at 614-728-8400. An unlicensed online lender may follow none of these rules.
2. A capped loan. No more than $1,000 per loan, and no more than $2,500 in short-term principal outstanding with all lenders combined.
3. Capped charges. 28% interest, a monthly fee of no more than $30, 2% origination on loans of $500 or more, and never more than 60% of the principal in total.
4. Three business days to change your mind. You can rescind the loan by returning the amount you borrowed by 5 p.m. on the third business day after the loan is made (section 1321.39).
5. A refund if you pay early. Charges you prepaid are refunded pro rata (section 1321.402).
6. Limits on collection. Section 1321.41 bars a lender from seeking treble damages, and from suing on a returned check or debit alone unless it can show fraud.
7. The federal Truth in Lending box. The APR, finance charge, amount financed, and total of payments must be disclosed in a standard box before you sign.

What happens if you cannot repay

A missed installment can bring one returned-payment charge per loan of up to $20, plus any amount passed on from other financial institutions (section 1321.40), and the lender can pursue the balance as a civil debt. Call the lender before the due date and ask about a refinance: Ohio law caps a refinance at 28% interest with no new maintenance fee, which can be cheaper than falling behind. Read what happens if you default on a payday loan for how collection works, and how to escape the payday loan cycle if one loan keeps replacing another. If the real problem is a bill you cannot cover, start with what to do when you can’t make this month’s payment.

Alternatives worth trying first in Ohio

A short-term loan is legal in Ohio but costs the most here, so these come first, roughly cheapest first:

Option	What it costs	The catch
Payment plan on the bill itself	Often nothing	You have to ask before the due date
211 referral to rent, utility, or food help	Nothing	What is funded varies by county
Federal credit union PAL I	Up to 28% APR plus an application fee of up to $20; $200 to $1,000, 1–6 months	One month of membership first; one PAL at a time
Federal credit union PAL II	The same caps; up to $2,000, 1–12 months	Not every federal credit union offers one
Ohio short-term loan (licensee)	About $123 in charges on $500 over about 91 days (above)	The $30 monthly fee applies whatever the balance; paying early cuts it

The credit union limits come from federal regulation (12 CFR 701.21(c)(7)): no more than three PALs in six months, and no rollovers. Call 211 to reach the local referral line. Employer pay advances and earned-wage apps cost more than their small fees suggest; payday loan alternatives that actually work has the numbers for each option. If an installment loan is on the table, installment loans vs. payday loans explains how to compare total cost.

If you do borrow, borrow the smallest amount you need, pay it down early to cut the monthly fees, and confirm the lender’s Ohio license before you sign.