Washington permits payday loans through licensed lenders
Washington allows payday loans under its small loan law. Lenders must have a check-cashing license plus a small-loan endorsement to make these loans in Washington, whether they do it in-person or online.
Washington’s financial regulator, DFI (Department of Financial Institutions), has a license verification page. You have to match a lender’s legal name to the Washington permissions in its record to confirm authorization. Advertising a loan on a website does not establish authorization to lend. DFI says it generally cannot regulate tribally owned lenders or handle complaints regarding them. When the record or the company’s status is unclear, you should ask the agency to check.
Your borrowing limit includes loans from other lenders
The Washington small-loan statute restricts the amount of the principal (cash borrowed before fees) and sets fee tiers described below.
| What is limited | How the rule applies |
|---|---|
| Unpaid principal | The total of unpaid payday principal at all licensed providers is capped at 30% of monthly income before deductions, and is further capped at $700. Use the cap that is lower. |
| Number of loans | Count the number of payday loans you take out in the last 12 months, including all the providers. The limit stops you from taking out a ninth loan in that rolling window. The count does not reset when you switch payday loan providers or when a new year begins. |
| Due date | On or after your next payday. If your next payday is no more than 7 days from the date you take out the loan, repayment must be on or after your second payday after the loan begins. |
| Initial term | Up to 45 days including weekends and holidays. Additional time beyond the 45 days may be agreed to by both parties, without the additional charge of interest or fees. |
Let’s say you earn $2,000 a month before deductions. Thirty percent is $600, so that is your limit for unpaid payday loan principal. If you already owe $300 in principal on payday loans, you have $300 left under that limit. This example shows nothing about whether you can afford to make another payment, and it does not mean a lender will approve you.
To determine eligibility for a payday loan, lenders use the state's shared loan records to check if borrowers have payday loans from other lenders. The company that holds the unpaid loan and companies related to it are barred from issuing a payday loan to settle that debt. The collateral for this type of loan cannot be a vehicle title or other personal property.
Calculate the fee in two parts above $500
A lender may charge $15 for every $100 of the initial $500 of principal. After that, the charge falls to $10 for every $100 of principal. These are limits on interest and fees combined. One provider may have several loans open in your name and must apply the tiers to the combined principal. Treating a $700 loan as if the entire balance attracted a 15% charge would be over the permitted fee.
| Part of the calculation | Amount |
|---|---|
| Cash received | $700.00 |
| Charge on the first $500 | $500 × 15% = $75.00 |
| Charge on the remaining $200 | $200 × 10% = $20.00 |
| Total loan charge | $75.00 + $20.00 = $95.00 |
| Scheduled repayment | $700.00 + $95.00 = $795.00 |
Assuming you are qualified for a $700 loan, receive the full amount, and repay once after 14 days with no returned payment or default fees, the estimated annual percentage rate (APR) is approximately 354%: ($95 ÷ $700) × (365 ÷ 14) × 100. In this case, the two week charge is $95. Annualizing a loan is commonly used to compare loans of different lengths. It does not make this a year-long loan.
Use the lender’s disclosed APR, dollar charge and payment date for an actual offer. The calculation provided above does not work to calculate the true APR for a loan paid back in several installments.
Request an installment plan before the due-date deadline
If the lump sum repayment will leave you unable to meet other financial obligations, then you can request the lender to convert the payday balance to the statutory installment plan. The lender is obligated to provide this plan if the request is made within the allowed time. Conversion will not attract interest and fees. However, it does not remove the charge for the original loan.
- Make the request on time. According to Washington's request-deadline rule, ask on or before the due date. The due date cutoff is the end of the business day unless otherwise specified in the loan agreement. In the agreement, the time can't be set earlier than 3 p.m. If the due date is extended by the lender, your request deadline is also extended. Make sure to document when you asked.
- Check the written schedule. Look first at the loan amount. The minimum period to repay a loan for up to $400 is 90 days. It is 180 days for a loan amount over $400. To set up an installment plan, a written agreement is required. The standard plan breaks the balance into three or more equal payments due at evenly spaced dates. Get a balance record showing all payments made and due dates. If you made periodic payments on the original loan, the remaining loan amount determines the length of the required installment plan, according to DFI.
- Replace the original payment arrangement. The original postdated check must be returned to you or destroyed at your request. Starting the plan also voids the original electronic-debit authorization. Any replacement checks or authorizations for electronic debit must be consistent with the plan's payment terms. Be sure to save a copy of the plan acknowledged by you and the lender.
In the $700 example, a $795 balance could be divided into six equal payments of $132.50, spread over at least 180 days. This shows how the payments could be structured and is not a monthly payment quote. You may pay off the plan early, and there are no prepayment charges.
While you're on an installment plan, you can't get additional payday loans from any licensed lender. This restriction is removed when you finish repaying the plan or if two years have passed since the plan started, whichever happens first. Having a payday loan in default means you can't get any payday loans, from any licensed lender. This restriction is also removed when the defaulted loan is fully repaid or if two years have passed since the defaulted loan was issued, whichever happens first. Changing payday lenders does not change this.
Canceling a new loan has a short deadline
To return a newly issued loan at no charge, get the advance to the business by closing time on the following day that the originating location operates. The cancellation rule lets you hand back the cash equal to the principal or the funding check that the business originally gave you. Once you cancel, your own security check or the electronic equivalent has to be returned to you.
Check the location's business hours instead of assuming the deadline means the next weekday. For an electronically funded loan, contact the lender immediately for return instructions. Keep proof of return of the funds within the cancellation period.
A returned payment is different from installment-plan default
A lender's fee on a returned check outside of a repayment plan is capped at $25. Sending the same check through the bank a second time creates no allowance for a fee. A lender will not charge a fee for a bounced check if that check covers an installment of a repayment plan. An installment that is still missing after a 10-day grace period declares the plan to be in default, and a single default charge of $25 may be assessed.
The default-fee rule limits the total of a lender's returned-check and installment-default charges to $25 for the life of a loan. These limits do not allow a lender to charge double (i.e. $50) for a single loan. A bank's own account charges are treated separately, so inquire who charged each disputed fee.
Harassing or threatening you with criminal prosecution to collect a debt is illegal. Your debt can still be collected through a legal civil process. If the company does not have the right license, refuses an installment plan requested in a timely manner, or adds a charge that you think is unjust, you can request the DFI review it through their complaint process. Be sure to provide copies of your agreements, receipts, messages and/or other related dates. DFI will first determine if they have the authority to act on the company; they cannot represent you in court. DFI may have to refer you to the agency that has the authority to assist you. To reach DFI, call 1-877-746-4334.
Rules and official resources reviewed October 4, 2026. This guide covers Washington's regulated payday loans and their statutory repayment plans.