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Massachusetts Payday Loan

Mark Cappel
UpdatedJun 24, 2008

Are payday loans legal in the Commonwealth of Massachusetts?

I live in Massachusetts and have taken out payday loans and paid them back. Then took them out again but now I'm in trouble have 8 payday loans. Can't pay them back. Massachusetts law does not allow any type of payday loans and yet they gave them to me. Did they break the law by giving me a payday loan? I only get Social Security disability. Can they touch that?

According to, payday loans are prohibited in the state of Massachusetts. However, some payday loan companies found loopholes within the law and use the internet to disburse the loans.

I would advice that you do more research on the companies that have lent you the money. You can also complain to the Office of Consumer Affairs & Business Regulation (OCABR, For more information and help, please visit the state information page on

Editor’s note

Comments on this page are closed. See Payday Loans to learn how to handle payday loan collections. See the payday loan resources for California, Florida, Illinois, Massachusetts, Missouri, New York, Texas, and Virginia to learn more about payday loan laws in those states.

As far as your social security income is concerned, keep in mind that payday loan companies will always insist on your account information so that they can present the checks or electronically debit your bank accounts. If your disability income is in the same account as the one that you used to get the payday loan, then I strongly advise you to open a new account and have your social security income deposited in your new account. Although social security income is protected from creditor judgments, once the money comes into the account, if you have written out checks or authorized direct debits, there is little you can do to stop them. Therefore, please change your bank accounts as soon as possible. also offers more information on the Payday Loan Information page, and has answered reader questions about payday loans in California, Florida, Illinois, Massachusetts, Missouri, New York, Texas, and Virginia.

If you do not repay a payday loan, the payday loan company has several legal remedies, including wage garnishment, levy, and lien. See the resource Collections Advice to learn more about the rights of creditors and debtors.

I can also point you to the Free Financial Planning and Budget Guide, which can help you manage your finances and learn about budgeting and prudent financial management.

I hope this information helps you Find. Learn & Save.




BBill, May, 2009
Frankie, thanks for your observation.
FFrankie Q., May, 2009
A payday loan is a great help when we are in a financial urgency. Let say you had a sudden expense and missed your utility bills and are facing utility disconnection, but your payday is still away. That is where they come in handy, and if you pay it back on payday, a payday loan won't build interest like a credit card. Come to think of it, there is nothing horrible about a payday loan. A payday loan is a small loan that you pay back quickly, usually the next payday. Usually $15 to $30 per $100 loaned is paid for fee for the financing.
BBill, Jun, 2008
That is great, and it is definitely a lower cost that overdraft fees. The problem arrises when consumers roll-over payday loans and when they do not have a clear path to paying them off... as the high interest rates can cause them to unravel very quickly.Best of luck, and please stay debt free for life!
kkmanhard, Jun, 2008
I think the payday loan system is great! There's not a single person who doesn't have emergencies and payday loans really help out. They're quick and easy and really do help.