Payday Loans are Legal in Washington

Beware of predatory lending

Payday Lenders in Washington

Payday loans are short-term loans designed to offer immediate financial relief when facing emergencies or unexpected expenses. Payday loans are designed to be paid back when the borrower receives their next paycheck and are often used by those with poor or no credit history, usually they are unable to obtain traditional loans or credit lines.

Washington state regulates the payday loan industry by mandating lenders abide by specific rules and regulations, loans in the state are steadily decreasing from over 3.2 million loans in 2009 to just over 800,000 in 2020. Washington has an APR average for payday loans around 150% which is still high but is significantly lower than national average.

Despite the state’s efforts to regulate the payday loan industry, borrowers in Washington still face risks. Borrowers could become trapped in a cycle of debt as they take out new loans to repay old ones – leading them to pay more in fees and interest charges that make it very difficult to regain their financial footing. It is imperative that borrowers carefully evaluate potential risks associated with payday loans before taking them out and ensure they are only using reliable lenders who prioritize borrower protection and value transparency.

Payday Loan Laws

Washington has passed strict regulations that protect consumers against predatory lending practices. The Washington State Department of Financial Institutions regulates, enforces, and controls rules that require lenders to provide accurate and complete disclosures of loan terms and fees. Interest rates are capped, and the number of loans an individual can borrow in a given year is limited. Lenders must also offer repayment plans to borrowers with difficulty repaying loans.

The State of Washington has several pieces of legislation surrounding payday loans:

Washington Rev. Code. Ann § 31.45.010: Sets the terms for loan amounts, finance charges and term lengths.
Washington Rev. Code. Ann § 31.45.073: Limits the number of transactions allowed to 8 in a 12 month period. No lender can loan more than $700 at one time. Prohibits rollovers.
Washington Rev. Code. Ann § 31.45.082: Sets allowable terms for collections and civil lawsuits against borrower for non-payment. Prohibits criminal action.

Loan Terms and Conditions

Maximum loan amount: $700 or 30% of monthly income (whichever is less)

Maximum Interest Rate: 391%

Minimum loan term: 7 days

Maximum loan term: 45 days

Number of rollovers allowed: None

Finance Charge: 15% of loan amount up to $500; 10% $501-$700

Legal action: 6 Years

Certified Payday Lenders in Washington

Company Name	Company score	License Status
Big Picture Loans, LLC	7.8	Valid
BlueChip Financial	7.2	Valid
Populus Financial Group, Inc.	6.8	Valid
Tribal Lending Enterprise, Inc.	6.2	Valid
CURO Intermediate Holdings	5.8	Valid
Rosebud Economic Development Corporation	5.2	Valid

History of Washington Payday Loans

Payday loans began in Washington in 1995 when the first payday lenders emerged offering high-interest loans to people who were struggling financially. However, it wasn’t until 1999 when the Legislature passed the Check Cashers & Sellers Act that the state implemented the first regulations overseeing payday lending. In 2010, the state further tightened payday loan regulations by limiting the number of loans borrowers could take out to just eight per year, and requiring lenders to scrutinize a special database before issuing any loans. This database contains detailed information about payday loans and borrowers, and helps lenders determine whether a borrower is eligible for a loan or not. Although there was an attempt to loosen payday loan regulations they have been unsuccessful and the laws governing payday loans in Washington remain unchanged.

State Resources

How to file a complaint

The Washington State Department of Financial Institutions regulates payday lenders in Washington and provides information about payday lenders’ licenses or complaints. Borrowers can file complaints against lenders online using their complaint form or submitting the form by fax or mail. They have a video to help guide consumers on how to file a complaint.

Washington Payday Loans Debt Relief

How to Get out of Payday Loan Debt?

Getting out of payday loan debt in Washington can be a challenging task, but it’s not impossible. Payday loans are a quick and easy solution to financial problems, but they can easily spiral out of control. To escape this cycle, borrowers should first try negotiating repayment plans with their lender. This could include reducing the amount owed or extending the payment terms to make the debt more manageable. Another option to consider is refinancing the loan with a lower interest rate. Filing for bankruptcy should be a last resort, and borrowers should always consult with a lawyer before taking this step. By exploring these options and being proactive in managing their debt, payday loan borrowers in Washington can successfully climb out of the debt trap and regain their financial freedom.

Support Resources

Types of Quick Loans in Washington

Cash Advance Apps Cash advance apps are becoming increasingly popular, but you should carefully read the terms and conditions of each app before you use it. They are mobile applications that offer short-term loans with high interest rates and fees, typically designed for individuals who need quick access to cash before their next paycheck. Before using an app, it may be useful to read user reviews and research the app. Cash advance apps should only be used by borrowers who are certain they will repay the loan on time.

Installment Loans Installment loans are a great option in Washington for people who want to borrow money and pay it back over time. Washington residents might want to look into local credit unions and banks for options on installment loans since they may offer lower interest rates and fees than online lenders. To avoid missing payments, borrowers should make sure to understand the repayment schedule and budget accordingly.

Credit Card Cash Advances Washington allows credit card holders to withdraw funds from their accounts instead of making an in-store purchase. The advances are convenient but come with higher interest rates and fees than normal credit card purchases and usually accrue interest instantly, so the borrower is required to pay interest right away. The borrower should review the credit card agreement before deciding if they want to get a cash advance. They should also weigh the costs and benefits.

Alternatives to Payday Loans in Washington

Personal Loans

Personal loans in Washington can provide access to funds for a variety of purposes, including debt consolidation, home repairs, or emergency expenses. Washington residents may want to consider local credit unions or banks for personal loan options, which may have lower interest rates and fees than online lenders. Additionally, personal loans may have fixed or variable interest rates and borrowers should choose the option that best fits their needs and budget.

Land Loans

In Washington, land loans can provide financing for purchasing land for residential or commercial purposes. These loans may be offered through local lenders and may have fixed or variable interest rates. Additionally, borrowers should be aware that land loans may require a downpayment and may have specific eligibility requirements.

Farm Loans

Farm loans and Orchard loans in Washington may be available for those who operate agricultural businesses. These loans can be used for purchasing land, equipment, or supplies. Washington residents may want to explore local lenders or the USDA for farm loan options. Farm loans may have specific eligibility requirements and may require collateral.

Bad Credit Loans in Washington

Bad credit loans may be available for those living in Washington who have a low credit score. They may be helpful to work on improving credit score to access better loan options in the future. However, borrowers should be aware that these loans may come with higher interest rates and fees. They are available in both secured and unsecured forms, with secured loans requiring collateral, such as a vehicle or savings account. Borrowers with bad credit scores are advised to perform thorough research and compare terms and fees from different lenders before borrowing. They may be helpful to work on improving credit score to access better loan options in the future.

Washington Small Business Loans

There are several types of small business loans available in Washington, including:

SBA loans: Loans that are partially guaranteed by the U.S. Small Business Administration and are designed to help small businesses access capital and obtain favorable loan terms.
Craft3 Loans for Small Businesses: Loans for small businesses in Washington with flexible terms and low rates.
Craft3 Energy Efficiency Loans: Loans that finance energy efficiency improvements for small businesses in Washington.
Washington State Community Economic Revitalization Board (CERB) Loans: Loans that fund public infrastructure projects, economic development projects, and small businesses in Washington.
Merchant Cash Advance: A lump sum of money provided to businesses in exchange for a percentage of future credit and debit card sales.

VA loans in Washington

VA loans are available to Washington veterans, service members, and their eligible spouses. These loans can provide financing for the purchase of a home, including new construction or refinancing an existing mortgage. VA loans may offer competitive interest rates, and there is no requirement for a down payment or private mortgage insurance. In addition, they have more flexible credit and income requirements than other loan options. Washington has a strong military presence, with several military bases and installations located throughout the state. As a result, VA loans may be a popular financing option for veterans and their families.

Washington Student Loans

Many options are available to Washington students to help finance their college education. These options include:

Federal Student Loans: These loans are offered by the federal government and include Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans.
Workforce Education Investment Act: Funding for students pursuing high-demand programs in Washington's community and technical colleges.
Guaranteed Education Tuition (GET) Program: A prepaid tuition program that allows families to lock in the cost of college education at Washington's public colleges and universities.
Private Student Loans: Loans from private lenders, they commonly have higher interest rates and may require a co-signer.

Washington Income Information

Washington state has a robust and diversified economy, with a lot of large corporations like Amazon, Microsoft, Boeing, and Starbucks headquartered there, making it one of the most business-friendly states in the country. The state’s natural beauty and recreational opportunities also make tourism a significant contributor to the economy, with visitors coming to explore the state’s national parks, forests, and mountains. Agriculture is also an important industry, with Washington being one of the largest producers of apples, cherries, and hops. According to the 2021 U.S. Census, Washington had a median household income of $82,400, significantly higher than the national median of $69,012. Median household income and poverty levels vary significantly by county in Washington, with King County having the highest median income at $99,158, 28.8% above the state average, and Ferry has the lowest at $41,685, 45.9% below the state average. The poverty percentage in Washington in 2021 was 9.9%.

United States Census Bureau. “Poverty in the United States: 2021.” Accessed on May 8, 2023.
United States Census Bureau. U.S. Census Bureau QuickFacts: Washington. Accessed on May 8, 2023.

Washington Payday Lender Complaints

Below are trends associated with some payday lenders in Washington, as reported to the Consumer Financial Protection Bureau.

Company Name	Count
Big Picture Loans, LLC	43
BlueChip Financial	16
Populus Financial Group, Inc. (F/K/A Ace Cash Express)	13
Tribal Lending Enterprise, Inc.	13
CURO Intermediate Holdings	11
Rosebud Economic Development Corporation	11
Total Complaints	239

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on May 8, 2023.

Most Common Issues

Complaint type	Count
Charged unexpected fees or interest	116
Struggling to pay loan	24
Can’t contact lender	15
Can’t stop withdrawals from bank account	13
Problem with payoff process	12

What are the main reasons residents of Washington apply for payday cash advance online or offline

Payday loans are typically used for nonnegotiable everyday expenses like your rent, utilities, and groceries. Per data reported by Pewtrust, the percentage of reasons described below

Reason	Share
Regular Expenses (Utilities, car payment)	53%
Unexpected emergency/expense	16%
Rent/Mortgage	10%
Something Special	8%
Other	5%
Did not answer	2%

Payday Lenders by City

Seattle
Spokane
Tacoma
Vancouver
Bellevue
Kent
Everett
Renton
Spokane Valley
Federal Way

Yakima
Kirkland
Bellingham
Auburn
Kennewick
Pasco
Redmond
Marysville
South Hill
Sammamish

Lakewood
Richland
Shoreline
Olympia
Lacey
Burien
Bothell
Bremerton
Edmonds
Puyallup

Frequently Asked Questions

Will applying for a payday loan impact my credit?

Payday loans are typically not reported to the three major credit reporting agencies, and most lenders do not conduct credit checks as part of their application process.

What do I need to apply for a payday loan?

To apply for a payday loan in Washington you will need valid identification, proof of monthly income and bank account information.

Can I cancel my payday loan?

Yes, you can cancel your payday loan but you will have to return what you borrowed and any interest fees that you may have accrued up to that point.

Can a payday loan lender garnish my wages?

Payday loan lenders can garnish your wages in Washington if they have a court order allowing them to do so.

Can spouses have separate loans?

Yes, spouses can have separate payday loans in Washington as long as they individually meet the lender’s eligibility requirements and can provide the necessary documentation and information to apply.

When will I receive my funds if I am approved for a payday loan?

Funds are typically received on the same day or the next business day after loan approval, and can be disbursed through various methods, such as direct deposit or a prepaid debit card.

What happens if I can’t repay my payday loan on time?

If a borrower is unable to repay their payday loan on time in Washington, the lender may charge additional fees, extend or roll over the loan, report the delinquent account to credit bureaus, or pursue legal action.

When could I apply for another payday loan?

Borrowers can apply for another payday loan as soon as they have repaid their current loan in full, but it’s important to consider alternative options for borrowing.