Personal Loans in New Mexico: What Licensed Lenders May Charge

How the New Mexico cap works

New Mexico uses one flat cap rather than tiers. Section 58-15-17(J) sets the permitted annual percentage rate at 36%, calculated under Regulation Z. Unlike the federal disclosure rules, the state's calculation must include charges for ancillary products and services, fees tied to the credit and credit insurance premiums. Only amounts paid to public officials, such as lien-recording fees, stay out.

There is one exception for very small loans: on a loan of $500 or less, a fee of up to 5% of the principal, charged no more than once in 12 months, is left out of the APR. The statute also lets the cap rise by one percentage point for each point the prime rate stays above 10% for three consecutive months, and fall back to 36% when it drops below 10% again.

What changed in 2023

House Bill 132, titled "Interest Rates for Certain Loans," was signed by the governor on March 1, 2022 as Chapter 23 of the Laws of 2022. Its amendment to Section 58-15-17 took effect on January 1, 2023 and lowered the small-loan cap from 175% to 36%. Loans made before that date followed the old rules; any loan you take from a licensed lender now falls under the 36% limit. See rule changes for other dated changes we track.

How New Mexico compares with its neighbors

On the National Consumer Law Center's comparison of a $2,000 two-year loan, New Mexico's 36% is lower than Texas at about 37%, Arizona at about 41% and Oklahoma at about 56%, and higher than Colorado at about 31%. Utah sets no numeric cap. The rules that apply follow the lender's license and your state of residence. The state rules map shows every state side by side.

Who needs a license and who does not

Anyone in the business of lending $10,000 or less in New Mexico must first get a license from the director, and such loans must be made under the Small Loan Act or the Bank Installment Loan Act (NMSA 58-15-3). Arranging loans above the state's limits online or by phone is covered even if the business has no office in the state.

• Banks, savings and loan associations and credit unions chartered by a state or the federal government are exempt from licensing.
• Bank partners can still need a license. Section 58-15-3(D) reaches an agent or service provider for an exempt entity when the loan exceeds the permitted rate and that company holds the predominant economic interest, markets or buys the loans, or is in substance the lender. Loans made in violation are void.
• Payday and title loans of $10,000 or less fall under the same Small Loan Act and its cap. Our sister site Lendmira describes them on its New Mexico lending laws page.

Check a lender and file a complaint

1. 1 Verify the license with the Regulation and Licensing Department's Verify a License search at https://www.rld.nm.gov/about-us/public-information-hub/verify-a-license/ before you apply.
2. 2 Keep the loan papers: the Truth in Lending disclosure, the agreement and a list of every add-on product you were offered.
3. 3 File a complaint with the department at https://www.rld.nm.gov/help-center/file-a-complaint/ if a lender charges more than 36% or will not tell you who the lender is.
4. 4 Send a complaint to the CFPB as well if the lender is a bank or a bank partner. Our guide on how to verify a lender lists the warning signs.

Questions people ask