Payday loans in Virginia

Virginia payday-loan rules: the direct answer

As of August 27, 2026, Virginia regulates payday-style credit through Chapter 18 short-term loans rather than the old one-paycheck model. A licensed short-term lender may make a loan of no more than $2,500. The usual term is at least four months and no more than 24 months; a shorter term is permitted only when the total monthly payment does not exceed the greater of 5% of verified gross monthly income or 6% of verified net monthly income. A lender cannot use a “cash advance” label to avoid these rules.

The current fee structure includes simple interest up to 36% annually, a monthly maintenance fee capped at the lesser of 8% of the originally contracted amount or $25, a returned-item fee up to $25 in specified circumstances and a late charge up to $20. Total fees and charges are capped at 50% of the original amount for loans of $1,500 or less, or 60% when the original amount is more than $1,500, excluding permitted return-item and late charges. Read the contract’s all-in arithmetic.

Virginia applies Chapter 18 to Internet short-term loans made to Virginia residents even when the company has no physical office in the Commonwealth. The State Corporation Commission (SCC) Bureau of Financial Institutions lists short-term lenders, verifies licenses and accepts complaints. A comparison lead is not a license or an approval; identify the actual creditor, servicer and payment company before authorizing a debit.

SCC licensing and online reach

Virginia requires a license before a person makes covered personal, family or household loans and charges interest, compensation or expense under the short-term-loan chapter. The law also covers arranging or brokering short-term loans for Virginia consumers. The anti-evasion language reaches devices, subterfuge and pretense, so an out-of-state address or a “marketplace” description does not automatically remove licensing duties.

Virginia’s licensing check is the first gate. Ask which entity funds the loan, which entity owns the receivable, who services payments and where complaints should be sent. A bank logo or NMLS reference may describe a partner rather than the Chapter 18 licensee. Do not pay an upfront release fee or share a bank password while the creditor identity remains unclear.

Amount, duration and payment-to-income test

A Virginia short-term loan cannot place a borrower under more than $2,500 of principal. The precomputed contract is generally repaid in substantially equal installments combining principal, fees and interest. The written agreement must state the principal, total fees and charges, payment amount, due dates, number of payments, maturity date, APR and any check-security terms. Keep the signed copy; a promotional estimate is not enough to reconstruct the obligation.

The standard minimum duration is four months and the maximum is 24 months. A term below four months is allowed only when the monthly payment passes the verified-income test: no more than 5% of gross monthly income or 6% of net monthly income, whichever is greater. The lender must make a reasonable attempt to verify income with a recent pay stub or other written evidence, including at least one document dated within 45 days of the transaction.

A lender cannot recommend that a borrower take more than requested, and it cannot make a new short-term loan while another short-term loan is outstanding, subject to the statute’s refinancing rules. Compare the proposed payment with rent, food, utilities and existing debt. Passing an income test does not prove that a payment is affordable for an individual household.

36% interest, maintenance fees and total-charge cap

Chapter 18 permits simple interest at no more than 36% annually. It also permits a monthly maintenance fee of the lesser of 8% of the original loan amount or $25, provided the fee is not added to the balance on which interest is charged. A $1,000 contract therefore cannot turn the maintenance line into an unlimited percentage charge. Check each month’s statement and the total expected dollars rather than relying on the headline rate.

A deposit-item return fee may not exceed $25 and must fit the statutory conditions and the written contract. A late charge is limited to $20. Separate from those items, the total-fee rule limits charges to 50% of the original amount for a loan up to $1,500 or 60% for a larger original amount. Mandatory membership, document, instant-transfer or insurance charges belong in the total-charge comparison when connected to the loan.

Advertising that includes a payment or finance charge must give APR examples for $300 repaid in three months, $500 in five months and $1,000 in ten months. Compare the example with the actual contract and ask for a written explanation when figures differ. The statutory cap is a compliance check, not a recommendation to borrow at the maximum price.

Rescission, electronic payment and partial payments

A borrower may rescind or cancel a Virginia short-term loan by returning the original loan-proceeds check or paying back the proceeds by 5:00 p.m. on the third business day after the transaction. Follow the agreement’s delivery instructions and request a dated receipt. The law also says electronic payment is optional and that a borrower may revoke or remove authorization at any time. Do not assume that closing a bank account is a complete notice of revocation.

A borrower may make partial payments in increments of at least $5 before maturity without a charge. On request, the licensee must provide a balance statement verbally and in writing, including the amount needed to pay in full on the request date and the next three business days. The licensee must give dated receipts and credit payments on the day received. Use these rights to verify the payoff rather than guessing from an app balance.

The lender may not threaten criminal proceedings because a security check is dishonored, may not draft electronically after two consecutive failed attempts without new written authorization and must stop electronic attempts when the borrower or agent asks. A lender also cannot use a confession of judgment, an out-of-state lawsuit clause or a waiver of legal recourse in the agreement.

Default, collections and complaints

If a lender uses an acceleration clause, it must wait at least ten days after a missed payment, provide written notice and calculate interest and earned fees as if the borrower voluntarily prepaid on the termination date. A lender may not initiate a legal proceeding until 60 days after default, leaving a period for a voluntary repayment arrangement. Keep every notice and do not ignore a court document.

Virginia requires collection activity to follow federal restrictions on harassment, false representations and unfair practices. If a short-term loan or servicing is sold to another licensee, the borrower must receive written notice and payment information no later than ten days before the next payment due date. Check that a new servicer provides the same contract and balance rather than inventing a new fee.

Virginia borrower verification checklist

A responsible Virginia comparison identifies a licensed creditor, a complete installment schedule and a payment that survives ordinary household expenses. If the offer depends on an upfront fee, hidden debit, oversized principal or a one-paycheck promise, pause and request the Chapter 18 contract before continuing.

1. Verify the actual short-term lender and any broker or servicer through the Virginia SCC Bureau of Financial Institutions Company Search.
2. Confirm principal is no more than $2,500, the term is four to 24 months unless the payment-to-income exception applies, and income evidence is current.
3. Recalculate 36% simple interest, the lesser-of-8%-or-$25 monthly maintenance fee, permitted return and late charges, and the 50% or 60% total-fee cap.
4. Read the contract for APR, payment schedule, maturity date, rescission by the third business day, optional electronic payment and revocation instructions.
5. Ask for a written payoff and use $5-or-more partial payments when needed; keep dated receipts and any balance statements.
6. If the loan defaults or changes servicers, preserve every notice, contact the company in writing and use the SCC complaint route without sending originals.

Virginia payday-loan FAQ

Question 1Are payday loans legal in Virginia?

Answer

Virginia regulates current payday-style credit as Chapter 18 short-term loans. A licensed lender may make up to $2,500 under installment, pricing, disclosure and consumer-protection rules; Internet lenders serving Virginia residents are covered too.

Question 2How much can a Virginia short-term loan be?

Answer

A licensee cannot cause a borrower to be obligated for more than $2,500 in principal on a short-term loan. The standard term is four to 24 months unless the verified-income payment exception applies.

Question 3What fees can a Virginia short-term lender charge?

Answer

The statute permits simple interest up to 36%, a maintenance fee capped at the lesser of 8% of the original amount or $25 monthly, specified return and late charges, and a total-fee cap of 50% or 60% depending on original principal.

Question 4Can I cancel a Virginia short-term loan?

Answer

Yes. Return the proceeds check or repay the proceeds by 5:00 p.m. on the third business day after the transaction, following the contract’s instructions. Electronic payment authorization is optional and revocable.

Question 5Where can I verify or report a Virginia payday lender?

Answer

Use the Virginia SCC Bureau of Financial Institutions Company Search for license status. Contact the company in writing first, then submit a documented complaint with copies of the agreement, receipts, advertising and timeline.

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