Personal Loans in Maryland: What Licensed Lenders May Charge

How the Maryland rate limit works

Section 12-306(a) keeps two schedules. The older one, with several brackets, dates from before July 1, 1982. Loans made on or after that date may use the simpler schedule below, as long as the loan has no balloon payment (unless payment in full is due on demand or within a year) and meets the code's rules on refinancing, adjustable rates and repossession.

To see how the brackets add up, take a $1,500 balance on a small loan. The first $1,000 may carry 33% a year ($330) and the other $500 may carry 24% ($120), or $450 a year, a blended 30% at the start. On a $5,000 loan the limit is 24% on the whole balance, or $1,200 in the first year. These figures illustrate the limit; they are not offers.

The older schedule is lower in places: for loans of $2,000 or less, 2.75% a month up to $500, 2% from $500 to $700 and 1.25% above $700; for larger loans, by original principal, 1.75% a month on loans up to $3,500, 1.5% on loans up to $5,000 and 1.35% on loans above $5,000. The same section bars a lender from taking interest in advance or compounding it. Because the APR on your Truth in Lending disclosure counts the finance charge as a yearly rate, you can set it directly against these limits.

How Maryland compares with its neighbors

On the National Consumer Law Center's comparison of a $2,000 two-year loan, Pennsylvania and Washington, D.C., cap the loan at about 24% APR and West Virginia at about 33%, while Virginia allows about 50%. Delaware sets no numeric cap. If you live near a state line, your state of residence and the lender's license decide which rules apply. The state rules map shows every state side by side.

Who needs a license and who does not

A business that makes any loan or advance of money or credit under the Maryland Consumer Loan Law (Commercial Law section 12-301 and following) needs a consumer lender license under Financial Institutions Article, Title 11, Subtitle 2. The OFR, part of the Maryland Department of Labor, issues it through NMLS. Since July 1, 2023, one license covers the principal office, and other locations operate under it once they are disclosed to the Commissioner.

• Installment loan lenders hold a separate OFR license; a consumer lender licensee does not need it to make certain non-mortgage loans.
• Banks and credit unions answer to separate charters and regulators, and a bank may charge the rates its home state allows. Online lenders that partner with a bank may lend through that bank, so ask who the lender of record is.
• Payday and title loans are covered by our sister site Lendmira on its Maryland lending laws page.

If a lender asks for a fee before it will approve or fund a loan, treat that as a warning sign; how to verify a lender explains what to check.

Check a lender and file a complaint

1. 1 Look up the license in the OFR license search or on NMLS Consumer Access before you apply.
2. 2 Keep the loan papers: the Truth in Lending disclosure, the agreement and any messages about fees.
3. 3 File a complaint with the OFR by following its complaint instructions online, or call its Consumer Response Unit at 410-230-6077, which can also tell you whether it regulates a provider.
4. 4 Send a complaint to the CFPB as well if the lender is a bank or a bank partner, or if you are unsure who regulates it.

Questions people ask