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Capped at 36% APR by citizen initiative in 2010 — replacing a ceiling of 400%. The first of the modern wave of ballot-box rate caps.
Quick answer · state law checked 2026-10-31
Is a payday loan legal in Montana? No. Montana does not authorise storefront payday loans (rate ceiling about 36% APR).
What can it cost? A voter-approved 36% all-in cap (I-164, 2010) made payday lending uneconomic; no licensed payday lenders remain.
If the loan goes unpaid: a collector has 6 years to sue, at most 25% (federal cap) of your pay can be taken after a court judgment, and you cannot be jailed for the debt. Details and sources below.
Initiative 164, approved 2 November 2010
I-164 capped yearly interest on payday and title loans at 36%. The previous ceiling was 400%.Montana · Ballot measureMontana Initiative I-164 (2010) — capped yearly interest rates of payday and title loans at 36 percent; the previous interest rate cap was 400 percent
Montana was the first of the modern wave of citizen-initiated 36% caps — South Dakota followed in 2016, Colorado in 2018, Nebraska in 2020. Every one of them passed.
Where a 36% cap has been put directly to voters rather than to a legislature, it has passed every time and usually by a wide margin: Montana 2010, South Dakota 2016 (76%), Colorado 2018 (77%), Nebraska 2020 (83%).
That is a striking pattern in a policy area where legislatures have often stalled for a decade or more — Ohio being the clearest example.
You can revoke authorisation and instruct your bank to stop the payment, whatever your agreement says.
What Regulation E says about automatic payments →
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A payday loan is a consumer debt. If it goes unpaid, two Montana rules decide what a lender can do next: how long it has to sue you, and how much of your pay a court can order taken.
Being sued over an old payday loan? A collector can still file, but the time limit is a defence you can raise — and you cannot be jailed for the debt. What can and cannot happen if you don’t pay →