Payday loans in Michigan

Michigan payday-loan rules: the direct answer

Michigan calls a payday loan a Deferred Presentment Service Transaction. The customer receives cash, pays a service fee rather than stated interest, and gives the provider a personal check or another authorized payment that is held until a later date. Michigan permits this narrow product when the provider follows the Deferred Presentment Service Transactions Act (DPSTA) and holds the required Department of Insurance and Financial Services (DIFS) license. State and nationally chartered banks and credit unions are the main statutory exceptions to that provider license.

The maximum transaction is $600. The service fee is tiered: 15% of the first $100, 14% of the second $100, 13% of the third, 12% of the fourth, 11% of the fifth and 11% of the sixth. At the maximum amount, the fee is $76. A customer may have no more than two payday loans open at once and may not have more than one open loan with the same lender. The repayment date cannot be later than 31 days after the transaction.

The offer cards below are national matching or referral services with separate reviews. A form that accepts a Michigan ZIP code is not proof that a DIFS-licensed provider is available. Before sending bank information, identify the actual creditor, the check or debit mechanism, the service fee, the maturity date and the entity responsible for servicing the transaction.

Michigan service-fee schedule and annualized cost

Michigan’s fee is calculated in $100 slices rather than as one percentage applied to the entire advance. A $100 transaction can carry a $15 fee; $250 can carry $35.50; and $600 can carry $76. Those figures are maximum service fees under the DPSTA, not an estimate of what a particular provider will charge. Ask whether a separate database, returned-payment or permitted account charge is included in the final written amount.

The DIFS consumer alert illustrates why a small dollar fee can be expensive. Borrowing $100 for fourteen days and paying the maximum $15 fee annualizes to about 391% APR. The fee is still $15 in dollars, but the short holding period makes the annual comparison very high. Use the actual amount deposited and the exact number of days in the contract instead of relying on a “low fee” headline.

Eligibility, database checks and two-loan limit

A licensed provider must check the state database before completing a transaction. The database is designed to show whether the customer already has an open transaction with that licensee and whether another lender would exceed the one-loan-per-lender or two-loan total limit. Do not assume that submitting several applications creates separate “offers”; overlapping requests can still lead to multiple debits or an unaffordable repayment day.

The provider will normally request identification, address, Social Security number or another identifier, requested amount, the check number or payment authorization and the requested maturity date. Read the privacy notice before submitting those details. A referral service may collect the information first and send it to one or more lenders, while the final DPSTA agreement is issued by a different legal entity.

Term, default, extensions and repayment assistance

The maturity date must be no more than 31 days from the transaction date. If the customer cannot pay on time, the lender may present the check or process the authorized payment. An insufficient-funds event can leave the customer responsible for the check face amount, a financial-institution NSF charge and the lender’s permitted returned-check fee, currently listed by the Attorney General alert as $31.14. The lender cannot use a criminal process to collect the payday debt.

Michigan law provides a repayment-plan right in a specific situation: a customer who cannot pay and has entered into eight deferred-presentment transactions with any licensee during a twelve-month period may request repayment in installments. The statutory database and written agreement control the details. A plan request is not a reason to authorize a fresh payday loan; ask the lender for the calculation, dates and total remaining balance in writing.

DIFS licensing and online lender verification

Every nonbank provider of a Deferred Presentment Service Transaction must be licensed by DIFS. Search the company’s exact legal name, location and license record at Michigan.gov/DIFS or ask the department at 877-999-6442. A brand name in an advertisement may be a lead seller rather than the licensee. Match the name on the final agreement, check instructions and debit authorization to the DIFS record.

DIFS cautions that online payday lenders are often not licensed in Michigan and may charge rates well above state limits. An out-of-state address, tribal affiliation, “credit service” label or claim that the company is only a marketplace does not identify who is making the DPSTA transaction. Ask which entity receives the service fee, which company reports to the database and who will answer a violation complaint.

What to do when a provider violates the Act

Michigan gives the customer a provider-first process. Put the alleged violation in writing and include the contract, receipt, fee calculation, check or debit authorization and payment history. The lender has up to three days to respond and notify the customer of its decision. If it determines that it violated the law, it must return the check and service fee; the customer still repays the cash received, while the provider owes restitution equal to five times the fee, subject to a $15 minimum and the check’s face amount maximum.

If the provider denies a violation or does not resolve the concern, file a complaint with DIFS. Keep copies rather than originals and record dates, phone numbers, web addresses and each attempted debit. DIFS can investigate regulatory compliance, but it is not the borrower’s attorney. A lawyer or qualified counselor can assess damages, contract defenses and bank-account steps for the individual facts.

Referral forms, ACH permissions and personal data

A lead marketplace may ask for employment, income, checking-account and identity details before showing a lender. Review consent for credit-bureau access, marketing calls or texts, electronic signatures and sharing with purchasers of leads. Save the page and privacy notice because the company that sends a confirmation email may not be the creditor named in the DPSTA contract.

Confirm whether the payment is a paper check, a one-time electronic debit or recurring ACH authorization, and learn how to revoke or stop it. Ask what happens when a scheduled debit fails and whether a retry creates another fee. Funding speed is conditional on lender approval and bank processing. A matched result is not a guarantee that the service fee, term or lender identity complies with Michigan law.

Michigan verification and lower-cost alternatives

Use the Borrow Radar cost calculator with the amount that reaches your account and the exact repayment date. Compare the resulting debit with rent, food, utilities, transportation and existing obligations. A lower-cost credit-union product or negotiated due date may solve the immediate gap without another short-term check. If the provider will not show the full price and legal identity in writing, pause before sharing more data.

1. Write down the referral brand, DIFS licensee, legal lender, servicer, physical address and all names in the consent or payment authorization.
2. Confirm the provider license with DIFS and ask whether the proposed product is a DPSTA transaction or a different regulated loan.
3. Calculate the tiered service fee from the amount, then record net proceeds, check face amount, maturity date, database status and permitted returned-payment charge.
4. Check that no more than two Michigan payday loans would be open and that only one is with the same licensee.
5. Save the agreement, fee receipt, database or eligibility record, privacy notice, debit consent, payment confirmations and complaint correspondence.
6. Ask an employer, biller, bank, credit union, family member or nonprofit counselor about a payment arrangement or small-dollar alternative before accepting a 31-day obligation.

Michigan payday-loan FAQ

Question 1What is a payday loan called in Michigan?

Answer

Michigan calls it a Deferred Presentment Service Transaction. The customer receives cash for a service fee and gives a check or payment authorization that is held until a later presentment date.

Question 2How much can a Michigan payday lender provide?

Answer

The maximum deferred-presentment transaction is $600. The service fee is tiered from 15% on the first $100 down to 11% on the fifth and sixth $100 portions, producing a maximum $76 fee at $600.

Question 3How many payday loans can I have in Michigan?

Answer

You may have no more than two payday loans open at one time and no more than one open loan with the same payday lender. The provider must use the state database to check the limits.

Question 4How long can a Michigan payday loan last?

Answer

The repayment date cannot be later than 31 days after the transaction date. If you cannot pay, a statutory installment-plan right can apply after eight transactions with any licensee in a twelve-month period.

Question 5Where can I report a Michigan payday-loan problem?

Answer

First complain to the lender in writing and keep the records. If the response is unsatisfactory, contact the Michigan Department of Insurance and Financial Services at 877-999-6442 or use its online complaint process.

Official Michigan