Oregon allows payday loans through licensed lenders
Oregon allows payday lending, including online lending by state-licensed businesses. The cap on interest is 36% annually, but there can also be an origination fee, which increases the loan’s APR. A claim that every Oregon payday loan is capped at 36% APR does not include this origination fee.
This document outlines rules in Oregon Revised Statutes Chapter 725A pertaining to payday loans. Other rules pertain to longer-term loans and vehicle-title loans. State law defines a payday loan as a loan in which the amount loaned is less than or equal to $50,000, the term of the loan is 60 days or less, and other definitions are satisfied. That limit describes a legal category and is not a guarantee that lenders will make $50,000 loans.
Make sure a company's legal name and website match one of the Oregon licensed payday lenders before sharing an application. Banks and credit unions do not need to be licensed for this activity. A company appearing on the list does not mean that the state of Oregon endorses the company’s loan or that the state of Oregon guarantees approval of the loan.
The term and the ability-to-repay review
Payday loans must have a term of 31 to 60 days. A two-week payday advance is not permitted because it does not meet the minimum term required by Oregon.
Lenders require a good-faith belief that you can repay the payday loan. These rules can provide safe harbor to payday lenders for making that determination. Safe harbor requires that the payday lender confirms the availability of repayment funds, verifies the customer’s existing debt obligations, and limits the payday loan to 25% of the customer’s monthly net income. The rules exclude customers whose annual net income exceeds $60,000 from this 25% test.
An example is presume that 25% of your $2,400 take-home monthly income is $600. This is an assumption that the lender has done an assessment of your repayment ability, and it's not an automatic approval amount. Also, just because a lender has determined you can afford a payment, it doesn't necessarily mean your personal budget can afford the payment.
What the interest ceiling and origination fee cost together
Lenders can charge 36% annual interest and a single origination fee capped at $30 and 10% of the loan amount. That fee is charged only once on the original loan and any renewals. Interest can not be compounded.
| Part of the payment | Calculation or amount |
|---|---|
| Cash received | $300.00 |
| Origination fee | 10% of $300 = $30.00 |
| Interest for 31 days | $300 × 0.36 × 31 ÷ 365 = $9.17, rounded to cents |
| Scheduled borrowing cost | $30.00 + $9.17 = $39.17 |
| Total repayment | $300.00 + $39.17 = $339.17 |
This assumes the highest interest and origination fee, a 365-day year, and no extra costs. All charges, including the origination fee, are paid at maturity, and the full $300 is received by the borrower. A longer term increases the interest. Other charges, for example, permitted costs associated with the state’s loan-tracking system, would increase the cost as well.
We estimate the annual percentage rate for this single-payment example is approximately 154% ($39.17 ÷ $300) × (365 ÷ 31) × 100. The dollar cost for this loan is still $39.17 for the 31-day period. The APR annualizes that cost; it does not extend the loan to one year. Read the lender’s actual APR and the repayment amount together to get the true cost of the loan instead of assuming the 36% interest cap is the true cost.
Two renewals do not erase the balance
In Oregon, a payday loan can only be renewed twice. Each renewal must last at least 31 days. When a payday loan is renewed, a lender cannot charge another origination fee. However, interest can be added for the extra time and the principal can remain unpaid.
Previously, the $300 advance came due after 31 days. Let’s say a lender allows more time in exchange for a payment covering just the previous charges: a starting fee of $30 and accrued interest of $9.17. A total of $39.17 is due, leaving the $300 principal amount still due. Request written terms stating when the loan comes due, what the interest will be, and the total amount due. A lender is under no obligation to provide an extension.
Seven days must pass after you settle a payday debt in full before another payday loan can be made. Reaching the original repayment date does not start the 7 day period. An unpaid payday or vehicle title loan also prevents a new loan, although qualifying renewals of the debt are allowed.
Paying early and keeping proof of payment
You will not be charged a prepayment penalty to pay the balance in full or in part before the scheduled due date. When the balance is repaid early, unearned interest will be refunded. The one-time origination fee will not be refunded. To determine the payoff amount on the date that you wish to pay, the lender is required to provide the information within three business days.
Your agreement must have five items in bold on the first page: the Annual Percentage Rate (APR), the amount borrowed, the finance charge, the full repayment amount, and the due date. Save your agreement and all your payment receipts. Each of your payment receipts must separate the amount paid toward the interest from the amount paid toward the principal, and must show the balance that is still owed. If you pay the lender directly rather than using the check or debit that you have previously arranged to pay, ask the lender how it will stop that check or debit from being used to collect payment again.
Portland has additional borrower protections
A payday business in Portland must comply with City Code Chapter 7.26 in addition to the state laws:
- Cancellation: You may cancel the loan by delivering written notice to the lender before the business closes on the next business day after the loan begins. You must also return the proceeds, the uncashed check received, or cash equal to the principal. This is without charge.
- Renewal: An extension means you'll have to pay back at least 25% of the principal amount you initially borrowed. You will also have to pay the interest on the remaining unpaid balance.
- Payment plan: After the maximum renewals and before default, the lender must allow conversion to a written plan of at least 60 days, with a minimum of 3 payments. The conversion must not add fees or interest charges.
Portland has these requirements. Don't assume the same deadline for cancellations or entitlement to payment plans applies statewide in Oregon. Ask about what protections are available to you if repayment is becoming difficult, and before the due date for payment passes, at the location where your loan is being managed.
Returned payments and disputed charges
For an dishonored check or insufficient funds, a lender’s own fee is limited to one charge up to $20 per loan transaction. The law allows for the recovery of the actual fee an unaffiliated financial institution charges the lender for a dishonored check. Your bank may charge your account for a dishonored check, according to its own terms. These are different fees, so request an itemized explanation.
The payday rules do not authorize an extra lender late fee. But, a collection amount allowed by statute or court order may apply to a defaulted loan. Contact the lender if you think you will not be able to make the payment, and keep any arrangement in writing.
For a licensing issue, unexplained charge, or collection dispute, use the financial services complaint process at the Oregon Division of Financial Regulation or call 888-877-4894. When doing so, be sure to keep copies of your contract, account statements, receipts, messages, etc. so that you can identify your lender and explain the dispute.
Rules and official resources reviewed October 3, 2026. This guide distinguishes statewide payday-loan rules from Portland's local protections.