Personal Loans by State

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Personal Loans

Updated Apr 11, 2024

7-min read

Written by Rebecca Lake, CEPF®

Expertise: Student loans, mortgages, home-buying, credit, debt, personal loans, education planning, insurance, investing, small business

Rebecca Lake is a certified educator in personal finance (CEPF®) and freelance writer specializing in finance.

Learn more about Rebecca Lake, CEPF®

Reviewed by Jim McCarthy, CFP®

Expertise: Education planning, retirement planning, investment management, insurance planning

Jim McCarthy, CFP®, ChFC®, is the owner of Directional Wealth Management, an independent financial planning and investment advisory firm in New Jersey. Jim advises families, professionals, executives, and business owners on how they can build better financial futures.

Learn more about Jim McCarthy, CFP®

Personal loans can put cash in your hands when you need to consolidate debt, cover an emergency expense, or make a large purchase. One factor to consider when comparing lenders is whether they offer personal loans in your state.

Some lenders operate in all 50 states, but many don’t. When comparing personal loans by state, it helps to know your options when choosing a lender.

In this guide:

How do personal loans vary by state?
Why are lenders not available in every state?
Should I use a lender headquartered in my home state vs. another state?
What are state limitations on lending?

How do personal loans vary by state?

Personal loans can vary by state in several ways, starting with which lenders offer them. Certain lenders offer personal loans to borrowers in all 50 states, and others have a smaller geographic footprint.

For example, brick-and-mortar banks may only offer personal loans in states where they have branches. They may lend to current or new customers but require borrowers to apply in person at a branch. Online lenders, meanwhile, may accept online applications but limit personal loans to states in which they’re licensed to lend.

If you’re curious about what’s available where you live, follow the links below to view our resources on personal loans in individual states.

Personal loans can differ by state concerning loan terms and rates. For instance, a lender might set the minimum loan amount at $5,000 in one state but reduce it to $1,000 in another. You could also see variations in the interest rates or loan fees you pay based on where you live.

State law can determine what consumer protections you have when taking out a personal loan. For instance, your state might set interest-rate caps on certain types of personal loans, including payday loans. States can also specify what remedies a borrower has if they believe they’ve been the victim of predatory lending.

Why are lenders not available in every state?

Lenders may not offer personal loans in every state if they’re not licensed to do so. States can require lenders to hold a license to offer personal loans. Each state can establish separate guidelines to determine when a license is necessary to lend.

Obtaining a lending license can be lengthy—and costly if the state charges licensing or registration fees. If a personal loan lender opts not to go through the steps required to obtain a license, it won’t be able to offer loans in that state.

For example, the lending license checklist for New York requires the following:

$3,000 application fee
Two most recent years’ financial statements audited by a certified public accountant
Minimum of $50,000 in liquid assets for the operation of each lending location
Minimum $100,000 net worth
Confirmed credit line of at least $100,000 issued by a banking institution
Minimum of five years of experience in the business of making consumer loans or evaluating consumer credit
Detailed business plan
Business formation documents
Sample documents illustrating loan plans
Management or organizational chart
Personal financial statements
Fingerprints for individuals in control of the business

Interest rates are another reason lenders might offer personal loans in one state but not another. States can set regulations on fixed and variable interest rates for loans. If those regulations don’t align with the lender’s interest rate ranges, it can choose not to offer loans there.

For example, if a state sets a maximum cap on variable rates at 19.99%, but the lender’s upper limit is 29.99%, it may choose not to do business in that state—or to only offer fixed-rate personal loans.

The same may be true if state law caps origination fees for personal loans. Lenders charge origination fees to underwrite the loan. Specific lenders charge no origination fees for personal loans, but others do. If the maximum fee exceeds the state’s cap, they may not offer loans in that state.

Should I use a lender headquartered in my home state vs. another state?

Whether it makes sense to choose a personal loan from a lender headquartered in your state versus another depends on your preferences and needs.

You might consider getting a personal loan from a lender in your home state if:

Interest rates are lower than personal loans from other states.
Loan fees, including origination fees or prepayment penalties, are lower or nonexistent.
Minimum and maximum loan amounts align with the amount you need to borrow.
Funding is faster than with a lender in a different state.

Convenience is also a consideration. For instance, you might prefer to get a personal loan from a local bank or credit union if you want the option to make payments or ask questions in person. Getting a personal loan from your current bank could also result in savings if you can get relationship rates for a good banking history.

When comparing personal loans, whether for lenders in your state or another, it’s crucial to weigh all the most critical factors. As you search for personal loans, remember to consider:

Interest-rate ranges
Whether loan rates are fixed or variable
Loan fees, including origination fees and prepayment penalties
Repayment terms
Loan funding speed
Application process
Special features or benefits, such as autopay discounts or other rate discounts

Quotes from top personal loan lenders can give you a better idea of what you might pay with different loan options. Be sure to look for lenders that offer a rate quote with no hard credit check because you don’t want to hurt your score before applying for a loan.

What are state limitations on lending?

States can set limits on consumer lending. Those limitations can extend to different aspects of the lending process, including:

When a license to make personal loans is required
Financial, credit, and other requirements to obtain a lending license
Whether the lender is required to have an in-state location or presence
Prohibitions or restrictions on online lending
Minimum and maximum loan amounts the lender can offer
Minimum and maximum loan terms allowed
Maximum financing rates and fees the lender can charge
Prohibitions on origination fees or prepayment penalties
Restrictions on usury

For example, in California, the state Department of Business Oversight regulates consumer lending. A license is required, but lenders don’t need an in-state presence and can make loans online. The state has no restrictions on minimum or maximum loan amounts, but there are requirements for minimum and maximum loan terms, interest rates, and fees.

In Texas, lenders are only required to have a license if the interest rate on loans is greater than 10% annually. Texas law allows consumer lenders to charge origination fees but sets an upper limit on the amount. It also limits the maximum loan term based on the loan amount and rate structure.

If you’re unsure about the laws in your state, you should be able to get help from your state’s consumer lending regulatory agency. It’s wise to check the fine print when comparing personal loan options to ensure a lender offers loans in your state and determine whether restrictions apply.