Ohio Short-Term Loan Laws and Protections
A consumer guide to Ohio's $1,000 maximum, installment requirements, interest and fee limits, cancellation right, and license checks.
Ohio Replaced Traditional Payday Loans
The Short-Term Loan Act in Ohio requires a different framework from the single-payment payday loans described in older materials. To provide a short-term loan in Ohio, a lender must be licensed by the Division of Financial Institutions and be subject to Ohio Revised Code sections 1321.35 to 1321.48.
The covered loan amount is a maximum of $1,000, and the loan amount must be repaid in substantially equal installments. The standard repayment term is between 91 days and 12 months. A term of less than 91 days is acceptable if the total monthly payment does not exceed the greater of 6% of verified gross monthly income or 7% of verified net monthly income.
Interest and Permitted Fees
Ohio permits annual interest of 28% as well as a monthly maintenance fee that does not exceed the lesser of $30 or 10% of the original loan amount. The maintenance fee also cannot be included in the balance of the loan that calculates interest.
Licensees charging an origination fee may charge that fee at 2% of an original loan amount of not less than $500. Other restricted charges include a $20 returned-payment collection fee plus an amount passed through from a third-party financial institution, and an amount not to exceed $10 for cashing a check that contains loan proceeds.
Because of these fees, the disclosed APR may exceed the 28% interest rate. With a few statutory exceptions, the total fees and charges combined may not exceed 60% of the amount of the initial loan.
Written Contract and Cancellation Right
The lender must prepare a written contract which must outline all fees, all payment amounts along with their due dates, the payment count, the contract's APR, and any necessary disclosures. Payment by any electronic means is optional, and the contract must say that the borrower may cancel authorization of payment by electronic means.
The contract can be canceled by the borrower if the borrower returns the loan amount on or before 5 p.m. on the third business day from the date the contract was signed. Keep proof of the return and written confirmation of cancellation.
Prepayment and Refinancing
If the loan is paid in full or refinanced before ending, the licensee is obligated to return a proportionate amount of interest, monthly maintenance charges, and other applicable time-related fees. Refinancing is permitted only when maintaining the 28% maximum annual interest and the absence of a new monthly maintenance fee for the refinanced loan.
Typically, a licensee may not give another short-term loan when the borrower currently has an outstanding loan with that licensee, a company under common control with the licensee, or with the licensee's employee or representative. A legitimate refinancing transaction is the only statutory exception to this.
Before Borrowing in Ohio
Before sharing your income, identity, or bank details, make sure to verify the license. Each payment must be compared to essential expenses, and the contract needs to be maintained. If repayment becomes difficult, reach out to the lender as soon as possible and keep a record of everything. An upfront-payment scam will ask for a gift card, wire transfer, or cryptocurrency payment.
Ohio Short-Term Loan Laws & Regulations
The current Short-Term Loan Act describes requirements for installments, income, costs, and disclosures. This cannot be restated as a standard two-week rollover product.
| Regulation | Ohio Rule |
|---|---|
| Governing law | Ohio Revised Code sections 1321.35 to 1321.48 |
| Regulator | Ohio Department of Commerce, Division of Financial Institutions |
| Maximum loan amount | Loans limited to $1,000 |
| Term | Terms typically range from 91 days to one year. Shorter terms require the statutory income-based payment test |
| Payment structure | Payments must consist of principal, fees, and interest and be made in substantially equal installments |
| Maximum interest rate | 28% is the maximum interest that can be charged in a year |
| Monthly maintenance fee | The lesser of 10% of the original loan or $30. This fee is waived for active-duty servicemembers and their dependents |
| Origination charge | A 2% fee is charged for loan amounts of $500 or greater |
| Total charge cap | Total fees and charges, with some statutory exceptions, may not exceed 60% of the original loan amount |
| Cancellation | To cancel, the original loan amount must be returned by 5 p.m. on the third business day after the loan was made |
| Electronic payment | Payment may be made electronically and is optional. The borrower may cancel the authorization at any time |
Review Ohio Revised Code section 1321.39 and section 1321.40. You can look up a company through the Ohio Division of Financial Institutions license search.
Statute and licensing links were checked September 7, 2026. State law and regulatory guidance may change.