Personal Loans in Virginia: What Licensed Lenders May Charge

How the Virginia rate limit works

Chapter 15 of title 6.2 of the Code of Virginia governs consumer finance loans. It was amended in 2020 (Acts of Assembly chapters 1215 and 1258), and Section 6.2-1520 sets one flat structure for installment loans: a single rate limit and a capped processing fee.

Interest may not be charged on an add-on basis or compounded; it runs only on the unpaid principal. The processing fee does not count as interest under the 36% limit, but it does count in the APR on your Truth in Lending disclosure. By our calculation, a $2,000 two-year loan at 36% with a $120 fee taken from the loan has an APR of about 43%. That is an example, not an offer.

How Virginia compares with its neighbors

On the National Consumer Law Center's comparison of a $2,000 two-year loan, Virginia allows more than most of its neighbors. Washington, D.C. caps that loan at about 24% APR, Maryland at 30%, West Virginia at 33% and North Carolina at 35%, while Kentucky allows about 42% and Tennessee about 49%. Your state of residence and the lender's license decide which rules apply, not where the lender is based. The state rules map shows every state side by side.

Who needs a license and who does not

Under Va. Code § 6.2-1501, no one may make consumer loans with interest and fees above the limit in § 6.2-303 without a license from the Commission, whether or not the lender has a location in Virginia. The same section also covers anyone who arranges or brokers consumer finance loans for a Virginia resident, wherever the broker is based.

• Anti-evasion rule: the license requirement reaches anyone who tries to avoid it by any device, subterfuge or pretense, including arranging a loan through a third person.
• Void loans: a loan made in violation of the licensing section is void, and no one may collect or keep principal, interest or fees on it.
• Banks and credit unions answer to their own charters and banking regulators instead, and a bank may charge the rates its home state allows. If an online lender says a bank makes your loan, ask who the lender of record is.
• Payday and auto title loans follow separate chapters. Our sister site Lendmira covers them on its Virginia lending laws page.

Late fees and paying early

Section 6.2-1520 limits the late fee on a consumer finance loan to $20, and only when a payment is not received and applied within 10 days of its due date. The fee may be charged once for each scheduled payment. If you pay the loan in full within the first 30 days, you are entitled to a rebate of the processing fee, minus an amount the statute lets the lender keep. A lender may charge an added processing fee on a refinancing or renewal no more than once in any 12 months.

Because interest is simple and runs only on the unpaid principal, paying early cuts the interest you owe. If a lender asks for a fee before it will approve or fund the loan, treat it 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 in NMLS Consumer Access or with the SCC's Bureau of Financial Institutions, by the company's name, before you apply.
2. 2 Check the terms against the limits above: 36% simple interest, a processing fee of at most $150 and a late fee of at most $20.
3. 3 Keep the loan papers: the Truth in Lending disclosure, the agreement and any messages about fees.
4. 4 Complain to the SCC's Bureau of Financial Institutions through the State Corporation Commission if a licensed lender breaks the rules.
5. 5 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