Borrowing $200–$5,000 in Michigan
Michigan still permits traditional payday lending. Under the Deferred Presentment Service Transactions Act a licensee may lend up to $600 for up to 31 days and charge a service fee of 15% of the first $100, 14% of the second, 13%, 12%, 11% and 11% of the rest, a maximum of $76 on $600, which legislative analysts put at about a 370% APR on a two-week loan. A bill to cap the fee at 36% (SB 632) passed the state Senate in March 2024 but had not become law as of our last check.
Everything else in Michigan is capped at a quarter of that or less: licensed lenders under the Regulatory Loan Act may charge up to 25%, federal credit unions 18%, and national online lenders price Michigan offers inside the 25% ceiling. For $200–$5,000, the gap between a payday storefront and any other option is wider in Michigan than almost anywhere.
The national picture for context: the average bank personal loan rate was 11.90% in August 2026 (Federal Reserve G.19), credit cards averaged 22.36%, and federal credit unions are capped at 18% everywhere. State law matters most at the small end, where it decides whether a $500 loan costs $8 or $75 for a month.
What you can borrow in Michigan, by amount
| Amount | Where Michigan borrowers can get it | Note |
|---|---|---|
| $200 – $600 | Credit-union PAL or small loan; earned-wage access; the payday product only as a last resort | A $600 payday loan costs $76 for two weeks; a $600 PAL costs about $10 for a month |
| $600 – $2,000 | Credit unions; Upgrade, Upstart, Happen Bank (from $1,000); OneMain (from $1,500); regulatory-loan licensees at ≤ 25% | Payday loans cannot exceed $600 |
| $2,000 – $5,000 | Online lenders (Avant, Best Egg, Prosper, Discover from $2,500); banks; credit unions | Licensed non-bank lenders cannot exceed 25% |
Lender minimums from our lender reviews (October 2026): Upgrade, Upstart and Happen Bank from $1,000; OneMain from $1,500; Avant, Best Egg and Prosper from $2,000; Discover from $2,500; LightStream and SoFi from $5,000. Availability varies by state and changes; confirm on the lender's site.
Michigan small-loan laws at a glance
Licensed regulatory loan lenders may charge up to 25% APR; payday lenders charge a service fee of 15% on the first $100 falling to 11% on the sixth $100, which the state calculates at roughly 370% APR on a two-week loan. Usury rule: 7% default; 25% for licensed lenders under the Regulatory Loan Act and Credit Reform Act.
| Product | Rule in Michigan | Notes |
|---|---|---|
| Payday loans | Legal: ≤ $600, ≤ 31 days; fee 15% of first $100, 14% of second, 13%, 12%, 11%, 11%; statewide database; max two loans at once | No rollovers, but no cooling-off period; 70% of borrowers reborrow the same day (CFPB data cited by the Legislature) |
| Licensed regulatory loans | Up to 25% APR under the Regulatory Loan Act | Licensed by DIFS |
| Auto title loans | Not authorized as a separate product; pawnbroker rules apply to pledges | |
| Unlicensed lenders | 7% usury default; 25% criminal usury | Banks exempt under federal law |
| Credit unions | Federal credit unions 18%; PALs 28%; Michigan credit unions serve over half the state's adults | |
| Military borrowers | 36% MAPR under the federal Military Lending Act |
State law governs non-bank lenders. Banks and federal credit unions follow federal rules, which is why a bank credit card can exceed a state cap while a state-licensed lender cannot. Laws change; the "verified" date above is when we last checked the statutes and regulator guidance cited in the sources.
What a $1,000 loan costs in Michigan, by source
Same $1,000, repaid over 12 months where the product allows it. Our amortization math at the ceilings described above; your rate depends on credit and may be far lower than a ceiling.
The order rarely changes: a credit union first, a national online lender or licensed installment lender second, and the payday product, where Michigan allows one, a distant last. For $2,000–$5,000 the comparison is mostly between online lenders and credit unions; use the payment calculator with the APR from a pre-qualified offer.
Where Michigan residents can borrow $200–$5,000
- A Michigan credit unionFederal credit unions are capped at 18% and can make payday alternative loans of up to $2,000 at no more than 28% with no membership waiting period (PAL II). Find one you can join by county, employer or association with the NCUA locator. State-chartered credit unions follow Michigan law and are usually priced similarly.
- A national online lender that lends in MichiganPre-qualify with two or three using soft inquiries. For $1,000–$2,000, Upgrade, Upstart and Happen Bank; for $2,000–$5,000, add Avant, Best Egg, Prosper and Discover. Offers show the APR with any origination fee included. See our lender reviews and bad-credit guide.
- A Michigan-licensed installment lenderStorefront and online lenders licensed by the Michigan Department of Insurance and Financial Services must stay within the caps in the table above. Useful for borrowers who want in-person service or cannot get an online approval; ask for the APR and total of payments in writing before signing.
- Your existing creditors and employerBefore borrowing at all: hardship plans from utilities, landlords and card issuers cost nothing, and many employers now offer earned-wage access at little or no cost. Our emergency loan guide ranks every option by cost.
Your rights as a Michigan borrower
- A payday lender must check the state database and may not lend if you already have two open loans; you may rescind a loan at no cost by the close of the next business day.
- If you cannot repay, you are entitled once in any 12-month period to a repayment plan of three equal installments; the lender may charge a fee of up to $17.20 for it.
- License checks and complaints: DIFS, (877) 999-6442. Payday lenders must post their fees and the APR equivalent in the store.
Federal protections apply on top of state law: the Truth in Lending Act requires the APR, finance charge, amount financed and total of payments in writing before you sign; the Equal Credit Opportunity Act requires a written reason if you are declined; and the Military Lending Act caps loans to active-duty servicemembers and dependents at 36% MAPR nationwide.
How to check a lender is licensed in Michigan
- State regulatorMichigan Department of Insurance and Financial Services (DIFS), (877) 999-6442. Licensee lists and complaint forms are on the site.
- NMLS Consumer Accessnmlsconsumeraccess.org lists most state-licensed non-bank lenders with their Michigan license status and history.
- Banks and credit unionsFDIC BankFind and the NCUA locator. Many online lenders issue through a partner bank named in the loan agreement.
- Scam signalsGuaranteed approval, any fee before funding, payment by gift card or wire, or terms above Michigan's caps. Our scams guide covers the rest.
Michigan personal loan questions
Are payday loans legal in Michigan?
Yes. Licensed lenders may make deferred presentment loans of up to $600 for up to 31 days, with a sliding service fee that reaches $76 on a $600 loan, roughly a 370% APR on a two-week term. You may have at most two payday loans outstanding. A 36% cap bill passed the Michigan Senate in 2024 but had not been enacted as of November 2026; check DIFS for the current status.
What is the maximum interest rate on a personal loan in Michigan?
For licensed non-bank lenders, 25% APR under the Regulatory Loan Act. Payday loans are priced as a service fee rather than interest and fall outside that cap. Federal credit unions are capped at 18%, and most national online lenders quote Michigan borrowers rates within the 25% ceiling.
What happens if I cannot repay a Michigan payday loan?
The lender cannot roll the loan over, but once in any 12-month period you can demand a repayment plan of three equal installments over the following three paydays, for a fee of up to $17.20. The lender may charge one returned-payment fee of up to $25 and cannot pursue criminal charges. Tell the lender before the due date.
Sources
State statutes and regulator publications as of November 1, 2026. We re-verify each state page after every legislative session and when a regulator announces a change. This page is general information, not legal advice; the regulator listed above can confirm current rules.
- Michigan Deferred Presentment Service Transactions Act, MCL 487.2121–487.2173 (loan limits, fee schedule, repayment plan). www.legislature.mi.gov
- Michigan Senate Fiscal Agency, analysis of S.B. 632 (2024), fee schedule and APR equivalence. www.legislature.mi.gov
- Michigan Regulatory Loan Act, MCL 493.1 et seq.; DIFS consumer finance pages. www.michigan.gov
- National Credit Union Administration, federal credit union interest-rate ceiling (18%) and Payday Alternative Loan rule (28%). ncua.gov
- Federal Reserve G.19, October 7, 2026 (national personal loan and credit card averages). federalreserve.gov
- Lender minimum amounts and state availability as verified for our lender reviews, October 2026.