Personal Loans in Maine: What Licensed Lenders May Charge

How the Maine rate tiers work

Section 2-401 of the Maine Consumer Credit Code applies each rate to its own part of the unpaid balance of the amount financed, so the blended rate falls as the loan grows. A second rule covers larger loans: when the amount financed is more than $8,000, the finance charge may not exceed 18% a year on the entire amount of the loan.

Here is how the two rules play out. On a $3,000 balance, the tiers allow 30% on $2,000 ($600 a year) and 24% on $1,000 ($240), or $840 a year, a blended 28%. On a $10,000 loan the tiers alone would allow about 21.6% at the start, but the 18% limit on the whole amount applies, so the most is $1,800 a year. These figures illustrate the limits; they are not offers.

The section also sets a minimum charge the lender may collect even when the rates would produce less: $5 when the amount financed is $75 or less, $15 from $75 to $250, and $25 when it is $250 or more. Compare the APR on your Truth in Lending disclosure with these limits; it counts fees as well as interest.

How Maine compares with its neighbors

On the National Consumer Law Center's comparison of a $2,000 two-year loan, Vermont caps the loan at about 21% APR and Massachusetts at about 24%, while New Hampshire allows about 36%. For a $10,000 five-year loan, Maine's 18% matches Vermont and is below Massachusetts (20%) and New Hampshire (36%). The state rules map shows every state side by side.

Who needs a license and who does not

Under 9-A M.R.S. section 2-301, a person may not make supervised loans, take assignments of and collect on them, or service mortgage loans without first getting a license from the administrator. For non-bank lenders, that is the Bureau of Consumer Credit Protection in the Department of Professional and Financial Regulation. Applications go through NMLS.

• Supervised financial organizations and certain financial institution holding companies are exempt from the license requirement. Banks and credit unions answer to their own regulators, and a bank may charge the rates its home state allows.
• Online lenders that partner with a bank may make loans through that bank, which can put the loan under the bank's home-state rules rather than the Maine tiers. Ask who the lender of record is.
• Payday and title loans follow separate rules. Our sister site Lendmira covers them on its Maine lending laws page.

If a lender asks for a fee before it will approve or fund a loan, treat that as a warning sign; how to verify a lender explains what to check.

Check a lender and file a complaint

1. 1 Look up the license on NMLS Consumer Access before you apply. A non-bank lender making supervised loans to Mainers should show a Maine supervised lender license.
2. 2 Keep the loan papers: the Truth in Lending disclosure, the agreement and any messages about fees.
3. 3 Complain to the Bureau of Consumer Credit Protection online or with its mailed form, or call 800-332-8529 (toll-free in Maine) or 207-624-8527; TTY 888-577-6690.
4. 4 Send a complaint to the CFPB as well if the lender is a bank or a bank partner, or if you are unsure who regulates it.

Questions people ask