How installment loans work
An installment loan is repaid in equal payments over months, not in one payment on your next payday; the examples below stay within Connecticut limits.
What installment loans can cost
These examples show how cost adds up. They are illustrative, not a quote. Your lender sets the actual rate and terms.
Representative example
- Amount borrowed
- $1,000
- Annual percentage rate (APR)
- 29.99%
- Repayment
- 12 monthly payments
- Payment
- $97.48
- Finance charge
- $169.76
- Total of payments
- $1,169.76
Example: a $1,000 installment loan at 29.99% APR repaid in 12 monthly payments of $97.48 costs $1,169.76 in total, including a finance charge of $169.76. Illustration only; your lender will disclose your actual APR, payment schedule and total cost before you accept a loan.
Representative example
- Amount borrowed
- $3,000
- Annual percentage rate (APR)
- 29.99%
- Repayment
- 12 monthly payments
- Payment
- $292.45
- Finance charge
- $509.40
- Total of payments
- $3,509.40
Example: a $3,000 installment loan at 29.99% APR repaid in 12 monthly payments of $292.45 costs $3,509.40 in total, including a finance charge of $509.40. Illustration only; your lender will disclose your actual APR, payment schedule and total cost before you accept a loan.
Representative example
- Amount borrowed
- $500
- Annual percentage rate (APR)
- 29.99%
- Repayment
- 12 monthly payments
- Payment
- $48.74
- Finance charge
- $84.88
- Total of payments
- $584.88
Example: a $500 installment loan at 29.99% APR repaid in 12 monthly payments of $48.74 costs $584.88 in total, including a finance charge of $84.88. Illustration only; your lender will disclose your actual APR, payment schedule and total cost before you accept a loan.
What Connecticut law allows
| Product | Status | APR cap | Amount | Term | License | Law |
|---|---|---|---|---|---|---|
| Installment and personal loans[1][2][3] | Allowed | 36% APR (top tier) | Up to $50,000 | Not set by statute | Small Loan Act license | Conn. Gen. Stat. Section 36a-555 to 36a-573, as amended by SB 1033 |
| Verified against the statute and regulator on September 23, 2026. Laws change; confirm with the regulator before you borrow. | ||||||
Bars place each APR cap on a 0 to 400% scale; the pin marks the cap. A striped bar means the statute sets no numeric cap.
The rules in full
Installment and personal loans
- Rate cap
- Connecticut's general usury cap is 12% APR for unlicensed lenders. Licensed Small Loan Act lenders (Conn. Gen. Stat. Section 36a-555 to 36a-573, as amended by P.A. 23-126) may make small loans up to $50,000; the all-in APR (calculated under the federal Military Lending Act, including fees) may not exceed the lesser of 36% or the MLA rate for loans under $5,000, and 25% for loans of $5,000 to $50,000.
- Fees
- All fees and charges must be folded into the all-in APR calculation under the 2023 amendments; no separate uncapped fees are allowed for licensed small loans.
- License
- Small Loan Act license issued by the Connecticut Department of Banking.
Full detail for every loan type: Connecticut lending laws.
Help in Connecticut
Rent and jobs in Connecticut
Typical rent and the jobless rate, to weigh before a loan payment.
Other options in Connecticut
Cheaper options to try first
Worth checking whatever your credit: these can cost less than a high-rate loan.
- Credit union payday alternative loans (PALs), capped at 28% APR under NCUA rules (12 CFR 701.21).
- Nonprofit credit counseling through the National Foundation for Credit Counseling.
- A payment plan from the company you owe, if you ask before you miss a payment.
- 211 for help with rent, utilities and food: call 211 or visit 211.org.
More cheaper options in Connecticut.
Other loan types allowed in Connecticut
Installment loans in nearby states
- Rhode IslandAllowed 36% APR (top tier)
- MassachusettsAllowed 23% APR
- New JerseyAllowed 30% APR
- New HampshireAllowed 36% APR
- VermontAllowed 24% APR (top tier)
Sources
- americanbar.org/groups/business_law/resources/business-law-today/2023-november/connecticut-broadens-scope-small-loan-act. Retrieved September 23, 2026.
- cga.ct.gov. Conn. Gen. Stat. Section 36a-555 to 36a-573, as amended by SB 1033. Retrieved September 23, 2026.
- portal.ct.gov. Connecticut Department of Banking. Retrieved September 23, 2026.
- National Low Income Housing Coalition. Out of Reach 2026: Connecticut. Retrieved September 23, 2026.
- U.S. Bureau of Labor Statistics. Local Area Unemployment Statistics (LAUS), All States, Seasonally Adjusted. Retrieved September 23, 2026.
Important disclosures
APRs vary by lender and state in Connecticut. Each lender sets its own rates and terms and must show you the APR before you sign.
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- Questions about a lender licensed in Connecticut? Contact the Connecticut Department of Banking or file a state complaint.
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