Personal Loans in Washington, D.C.: What Licensed Lenders May Charge

How the 24% ceiling works

The District uses one flat ceiling rather than tiers by loan size. Section 28-3301(a) says parties to a written instrument for the future payment of money may contract for interest on the principal at a rate not exceeding 24% a year. The same 24% figure applies to loans secured by a home or a cooperative interest under subsections (b) and (c).

• Who it protects: subsection (h) applies the chapter to consumer credit in the District. A deal counts as made in D.C. if the creditor receives the signed agreement there, or if a D.C. resident enters it with a creditor that solicited or advertised in D.C.
• What it leaves out: loans above $2,500 to a business, investment, nonprofit or religious borrower may carry any agreed rate. A lender may not require you to sign a false statement that your loan fits one of those exemptions.

Compare the APR on your Truth in Lending disclosure with the ceiling, since the APR counts interest and most fees together.

How the District compares with its neighbors

On the NCLC comparison of a $2,000 two-year loan, Maryland allows about 30% APR and Virginia about 50%. If you live in the District and borrow from a lender based in Maryland or Virginia, D.C. law can still apply when the lender solicited or advertised to you in D.C. The state rules map shows every state side by side.

Who needs a license and who does not

D.C. Code § 26-901 requires anyone engaged in the District in lending money at a rate above 6% a year to hold a money lender license. The license is issued as a Financial Services endorsement to a basic business license, and a corporate lender must appoint a registered agent in the District. A DISB consumer guide on borrowing online says companies lending to D.C. residents must be licensed by DISB, and that only licensed lenders come under the 24% limit and DISB's protections.

• Banks and credit unions answer to their own charters and banking regulators, and a bank may charge the rates its home state allows.
• Online lenders that partner with a bank may make loans through that bank, which can put the loan outside the D.C. ceiling. Ask who the lender of record is before you sign.
• Payday and title loans are a separate subject. Our sister site Lendmira covers them on its Washington, D.C. lending laws page.

The DISB guide also warns that some online loans charge more than the 24% limit and some renew automatically every payday, so they can cost far more than the amount borrowed. If a lender asks for a fee before it will approve or fund the loan, treat it as a warning sign; how to verify a lender explains what to check.

Check a lender and file a complaint

1. 1 Verify the license by calling DISB at (202) 727-8000 or by searching NMLS Consumer Access, before you apply.
2. 2 Check the APR on the disclosure. A nonbank offer above 24% to a D.C. resident is a reason to ask the lender which law it lends under.
3. 3 Keep the loan papers: the Truth in Lending disclosure, the agreement and any messages about fees.
4. 4 Complain to DISB through its complaints page, by email to [email protected], by phone at (202) 727-8000 or by mail to 1050 First St. NE, Suite 801, Washington, DC 20002.
5. 5 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