Payday Loans are Legal in Maine

Beware of predatory lending

Payday Lenders in Maine

Payday loans are short-term loans intended for people who need temporary financial support due to personal circumstances. With a quick repayment schedule, the loan is typically due on the borrower’s next payday. Maine borrowers should know the fees and terms before agreeing to the loan since they often amount to a lot. While payday loans can be beneficial, it’s crucial for borrowers to fully comprehend the loan conditions to make informed decisions.

If you’re looking for legitimate payday loans in Maine, there are only 10 licensed lenders according to the Department of Professional and Financial Regulation Bureau of Consumer Credit Protection as of 2021, a number that has been decreasing over the last few years. Payday loans only account for 1% of all loans in the state. It is important to research each lender that makes you an offer and pay special attention to online lenders that may be using predatory practices to lure you into a scam.

Payday Loan Laws

Maine is one of the most strict states when it comes to payday lending in the United States. All lenders must be licensed in their operating location, the interest rate cap is very low and lenders are not allowed to cash a post-dated check, meaning they have very little security that the borrower will payback the loan. Technically, there is no maximum loan amount that can be issued, but the APR rate restrictions change when more than $2000 is borrowed. It is important to note that there are no requirements for repayment plans in the regulation.

The State of Maine has several pieces of legislation that govern payday loans:

Loan Terms and Conditions

Maximum loan amount: Less than $2000 (to qualify for 30% APR cap)

Maximum Interest Rate: 30% APR

Minimum loan term: No minimum defined in legislation

Maximum loan term: No maximum defined in legislation

Number of rollovers allowed: Not regulated by legislation

Finance Charge: $5 if less than; $15 if $75-250; $25 if more than $250

Legal action: 5 Years

Certified Payday Lenders in Maine

Company Name	Company score	License Status
Big Picture Loans, LLC	7.6	Valid
LDF Holdings, LLC	7.1	Valid
TMX Finance LLC	6.8	Valid
D2 Management LLC	5.2	Valid
Four Directions Lending, LLC	4.8	Valid
Populus Financial Group, Inc.	4.1	Valid

History of Maine Payday Loans

Payday loans have been a controversial financial product in many states, including Maine. Before 2005, payday loans were legal in Maine and were offered with fewer restrictions. This led to a cycle of debt where borrowers would take out new loans to pay off their old ones, accumulating more fees and interest charges in the process. These practices were criticized by consumer advocates who argued that they preyed on vulnerable individuals who were struggling to make ends meet. In 2005, Maine enacted a law that restricted payday loans to 30-day terms, with a maximum fee of 30% per $100 borrowed as a response to these concerns and aimed to protect consumers from the harmful effects of payday loans. This law was designed to protect consumers from falling into debt traps, but many payday lenders found ways to circumvent the law by offering loans through out-of-state banks. In response, Maine’s Attorney General initiated legal action against several payday lenders for violating the state’s usury laws. The legal battles led to settlements and, ultimately, a reduction in the number of payday lending stores in the state.

State Resources

How to file a complaint

The Maine Bureau of Consumer Credit Protection accepts complaints online and through the mail. They also accept phone calls and in-person complaints. They will try to resolve the complaint as quickly as possible. According to their website, most complaints are resolved in 30-45 days.

Maine Payday Loans Debt Relief

How to Get out of Payday Loan Debt?

Getting out of payday loan debt in Maine can be challenging, but it is possible with careful planning and action. One option is to negotiate with the lender to create a repayment plan that works for both parties. This may involve reducing the interest rate, extending the repayment period, or agreeing on a payment schedule that fits the borrower’s budget. Another option is to seek credit counseling or financial coaching from a reputable organization. These organizations can provide guidance on budgeting, debt management, and financial planning. It is also important to avoid taking out additional payday loans or using other high-interest credit products, as this can exacerbate the debt problem. By taking proactive steps and seeking professional support, borrowers in Maine can successfully navigate their way out of payday loan debt.

Support Resources

Types of Quick Loans in Maine

Credit Card Cash Advance Credit card cash advances may offer quick cash solutions in Maine, but they often come with high fees and interest rates. Cash advances act like loans that cardholders can access either by using their card at an ATM or receiving a check from their credit card company; fees associated with cash advances tend to be higher than usual as they're assessed as a percentage of what was borrowed, plus many do not include grace periods (meaning interest accrues immediately). Although cash advances can provide quick access to funds quickly, care should always be taken when using them.

Installment Loans Maine residents can also apply for installment loans. Installment loans are repaid in installments with rates based on creditworthiness. They can be used to consolidate debt, pay for home repairs or unexpected expenses. They have lower interest rates and longer repayment terms than payday loans.

Lines of Credit Lines of credit are flexible loans that Maine residents can use to borrow funds when needed up to an approved credit limit. They can borrow and repay funds at any time as long as they stay within the approved limit. Lines of Credit are usually unsecured, meaning they don't require collateral. They may be subject to a credit review and have higher interest rates compared to secured loans.

Alternatives to Payday Loans in Maine

Personal Loans

Personal loans are the most popular unsecured loan available in Maine. These loans are used for a variety of purposes by borrowers, including home improvements, consolidation of debt, and unexpected expenses. Personal loans have fixed rates of interest and monthly payments that make them easier to budget. Lenders will often offer lower rates of interest and better repayment terms to borrowers with excellent credit. Those with bad credit may be subjected to higher interest rates and stricter eligibility requirements by creditors.

Bridge Loans

Bridge loans are a type of short-term financing used by many individuals in Maine to purchase a new property before selling their existing one. Bridge loans are often used in situations where a conventional loan is not available or where the borrower needs quick access to cash. Lenders typically require an equity interest in the property and may limit the loan-to-value ratio to up to 80%. To qualify for a bridge loan, borrowers are typically required to provide proof that they will be able to close on the sale or obtain a conventional loan within a specific timeframe, usually four months or less. Bridge loans are considered a form of non-mortgage or specialty financing and are meant to be repaid within a short period of 1 to 3 years.

Home Equity Loans

Home equity loans in Maine are secured loans that homeowners obtain to gain access to cash. These loans allow homeowners to borrow at a fixed rate of interest with a pre-determined repayment period using the equity in their homes as collateral. Home equity loans can be used to pay for unexpected expenses, consolidate debt, or make home improvements. They may offer some benefits, such as tax breaks, but they can also lead to foreclosure if borrowers are unable to pay.

Bad Credit Loans in Maine

Bad credit loans are a type of loan that is available to borrowers in Maine who have poor credit or limited credit history. These often have higher interest rates and more fees than traditional loans and could require collateral or a co-signer to qualify. Bad credit loans can be used for debt consolidation, home repairs, or unexpected expenses.

Maine Small Business Loans

Small business loan options in Maine:

SBA loans: The SBA offers a variety of loan programs, including 7(a) loans, 504 loans, and microloans, to help small businesses access funding for things like, such as working capital, equipment purchases, and real estate investments.
Maine Rural Development Business & Industry (B&I) Loans: These loans are available to businesses located in rural areas and are administered by the U.S. Department of Agriculture.
Finance Authority of Maine (FAME) Loans: FAME offers several loan programs for small businesses, including the Maine Seed Capital Tax Credit Program and the Maine Technology Institute (MTI) Seed Grant Program.
Community Development Block Grant (CDBG) Loans: These loans are offered through the Maine Department of Economic and Community Development and are available to small businesses in designated communities.
Microenterprise Development Loan Program: This program is designed to help small businesses in Maine with fewer than five employees and offers loans of up to $50,000.

VA loans in Maine

VA loans are a popular financing option among veterans and active-duty service members in Maine. These loans are offered by private lenders but are guaranteed by the VA. The main advantage of VA loans is that they often require no down payment, making them an accessible option for those who might not otherwise be able to afford a home. VA loans also have no mortgage insurance requirements and often come with lower interest rates. Additionally, VA loans may offer more flexible credit requirements, making it easier for veterans and active-duty service members to qualify for a loan. To be eligible for a VA loan, individuals must have served a minimum period of time in the military and must have been honorably discharged. VA loans are a valuable benefit for those who have served their country and can provide a path to homeownership that might otherwise be out of reach.

Maine Student Loans

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

Federal Student Loans: Low-interest loans backed by the federal government that can be used to pay for education expenses.
Maine State Grant Program: This program provides need-based grants to Maine residents who are enrolled at least half-time in an undergraduate degree program.
Maine Medical Education Foundation (MMEF) Loan: This program provides loans to medical students who are residents of Maine and plan to practice medicine in the state after graduation.
Employer Tuition Reimbursement Programs: Some employers offer tuition reimbursement programs as a benefit to their employees.
Private Student Loans: Loans offered by private lenders that can be used to pay for education expenses, with interest rates and terms that can vary widely.

Maine Income Information

The recently released 2021 U.S. Census reports show Maine having a median household income of $63,182, somewhat lower than the national median of $69,021. Maine’s economy is heavily dependent on industries such as fishing, manufacturing, and tourism. With a high concentration of small businesses and a growing focus on sustainable industries, Maine’s economy is poised for continued growth and development in the coming years. Maine’s median household income varies widely by county, with Cumberland County being the highest at $76,014, and Aroostook County being the lowest at $43,791, the state’s poverty rate was 11.5% in 2021.

United States Census Bureau. “Poverty in the United States: 2021.” Accessed on April 25, 2023.
United States Census Bureau. U.S. Census Bureau QuickFacts: Maine. Accessed on April 25, 2023.

Maine Payday Lender Complaints

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

Company Name	Count
Big Picture Loans, LLC	3
LDF Holdings, LLC	2
TMX Finance LLC	2
D2 Management LLC	1
Four Directions Lending, LLC	1
Populus Financial Group, Inc. (F/K/A Ace Cash Express)	1
Total Complaints	10

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on April 25, 2023.

Most Common Issues

Complaint type	Count
Charged Unexpected fees or interest	5
Struggling to pay loan	2
Can’t contact lender	1
Can’t stop withdrawals from bank	1
Money withdraw on wrong day	1

What are the main reasons residents of Maine 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

Portland
Lewiston
Bangor
South Portland
Auburn
Biddeford
Scarborough
Sanford
Brunswick
Saco

Westbrook
Augusta
Windham
Gorham
Waterville
York
Falmouth
Orono
Kennebunk
Wells

Standish
Kittery
Brewer
Lisbon
Cape Elizabeth
Topsham
Old Orchard Beach
Yarmouth
Presque Isle
Bath

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. However, they may do a soft credit check to verify your creditworthiness.

What do I need to apply for a payday loan?

To apply for a payday loan in Maine, you will need verification of your name, age and social security number, verification of your address, details about your employment and income and banking details.

Can I cancel my payday loan?

In Maine, borrowers have up to one business day to cancel a payday loan by returning the full amount borrowed to the lender and providing written notice of their intention to cancel.

Can a payday loan lender garnish my wages?

If a valid court judgment is obtained, any lender, creditor, debt collector, or debt trader can garnish your wages in Maine.

Can spouses have separate loans?

Yes, spouses can have separate loans in Maine. Each individual can apply for a loan based on their own creditworthiness and financial situation, and the loan will be in their own name.

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

If approved for a payday loan, funds can typically be received on the same or next business day through direct deposit or in-person pickup, depending on the lender’s policies.

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

If you can’t repay a payday loan on time, the lender may charge additional fees and interest, and take legal action to collect the debt, which can harm your credit score. There are no specific regulations requiring lenders to offer extended repayment plans in Maine.

When could I apply for another payday loan?

In Maine, you can apply for another payday loan as soon as you pay off your previous loan.