Personal Loans in North Carolina: What Licensed Lenders May Charge

How the North Carolina rate tiers work

G.S. 53-176 covers installment loans of up to $25,000, repaid in substantially equal monthly payments over 12 to 96 months and not secured by real estate. Interest is simple interest on the unpaid principal, and each slice of the balance carries its own maximum rate. As you pay the loan down, more of the balance falls into the higher-rate first slice, so the blended rate on a mid-size loan is lower than 33% but not as low as 18%.

The lender may also charge a processing fee at closing: up to $30 on a loan of $3,000 or less, and up to 1% of the amount financed, with a $150 maximum, on larger loans. It may charge that fee no more than twice in any 12 months. Because the fee is a finance charge, the APR on your Truth in Lending disclosure will be a little higher than the tier rates.

What changed in 2023

Session Law 2023-61 (Senate Bill 331) amended the Consumer Finance Act. The General Assembly ratified it on June 8, 2023, and it became law over the governor's veto on June 27, 2023. It applies to loans entered into, modified or renewed on or after October 1, 2023.

• Larger loans: the act now covers loans of up to $25,000, up from $15,000.
• New tiers: the first-tier rate rose from 30% to 33%, and the three-tier structure now reaches loans of up to $12,000 instead of $10,000.
• Higher fees: the processing fee cap rose from $40 to $150 on larger loans and from $25 to $30 on small ones, and the late fee cap rose from $15 to $18.

Loans made before October 1, 2023 keep their original terms unless they are modified or renewed. See rule changes for other dated changes we track.

How North Carolina compares with its neighbors

On the National Consumer Law Center's comparison of a $2,000 two-year loan, North Carolina's 35% is above Georgia at about 32% and well below Tennessee at about 49% and Virginia at about 50%. South Carolina 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

Under G.S. 53-166, anyone in the business of lending or servicing loans of $25,000 or less who charges more than Chapter 24 permits, counting interest, fees and expenses together, must first get a license from the Commissioner of Banks. The rule reaches anyone who tries to avoid it by any device, subterfuge or pretense. A loan made in violation is void: the lender may not collect principal or charges, except for an accidental or good-faith computation error.

• Banks and credit unions answer to their own charters and banking regulators instead, 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 outside the Consumer Finance Act tiers. Ask who the lender of record is.
• Payday and title loans are covered on our sister site Lendmira's North Carolina lending laws page.

Check a lender and file a complaint

1. 1 Check the license before you apply: the Commissioner of Banks' Who We Regulate page explains which lenders it licenses, and the lender should give you its license number.
2. 2 Keep the loan papers: the Truth in Lending disclosure, the agreement and any messages about fees.
3. 3 Complain to the Office of the Commissioner of Banks online at https://nccob.nc.gov/consumer-information/consumer-inquiries-and-complaint-information or by phone at 919-733-3016.
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