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 Massachusetts 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)
- 23%
- Repayment
- 12 monthly payments
- Payment
- $94.08
- Finance charge
- $128.96
- Total of payments
- $1,128.96
Example: a $1,000 installment loan at 23% APR repaid in 12 monthly payments of $94.08 costs $1,128.96 in total, including a finance charge of $128.96. 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)
- 23%
- Repayment
- 12 monthly payments
- Payment
- $282.23
- Finance charge
- $386.76
- Total of payments
- $3,386.76
Example: a $3,000 installment loan at 23% APR repaid in 12 monthly payments of $282.23 costs $3,386.76 in total, including a finance charge of $386.76. 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)
- 23%
- Repayment
- 12 monthly payments
- Payment
- $47.04
- Finance charge
- $64.48
- Total of payments
- $564.48
Example: a $500 installment loan at 23% APR repaid in 12 monthly payments of $47.04 costs $564.48 in total, including a finance charge of $64.48. Illustration only; your lender will disclose your actual APR, payment schedule and total cost before you accept a loan.
What Massachusetts law allows
| Product | Status | APR cap | Amount | Term | License | Law |
|---|---|---|---|---|---|---|
| Installment and personal loans[1][2][3] | Allowed | 23% APR | Up to $6,000 | Not set by statute | Small Loan Company license | M.G.L. c. 140, sections 96-114A; 209 CMR 20.00 |
| 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
- Small loans (loans of $6,000 or less at 12% APR or higher) require a Small Loan Company license and are capped at 23% APR under the Small Loan Rate Order issued under M.G.L. c. 140, section 96. Administrative fee capped at $20; no other finance charge permitted beyond the 23% rate and that fee.
- Fees
- Administrative fee not to exceed $20; no finance charge beyond the 23% APR and that fee.
- License
- Small Loan Company license issued by the Massachusetts Division of Banks (DOB), under 209 CMR 20.00 and M.G.L. c. 140, sections 96-114A.
Full detail for every loan type: Massachusetts lending laws.
Help in Massachusetts
Rent and jobs in Massachusetts
Typical rent and the jobless rate, to weigh before a loan payment.
Other options in Massachusetts
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 Massachusetts.
Other loan types allowed in Massachusetts
Installment loans in nearby states
- Rhode IslandAllowed 36% APR (top tier)
- ConnecticutAllowed 36% APR (top tier)
- New HampshireAllowed 36% APR
- VermontAllowed 24% APR (top tier)
- New YorkAllowed 25% APR
Sources
- Justia. M.G.L. c. 140, sections 96-114A. Retrieved September 23, 2026.
- infobytes.orrick.com/2025-10-17/massachusetts-finalizes-amendments-to-small-loans-truth-in-lending-and-mortgage-licensing-regulations. Retrieved September 23, 2026.
- mass.gov. Massachusetts Division of Banks (DOB). Retrieved September 23, 2026.
- National Low Income Housing Coalition. Out of Reach 2026: Massachusetts. 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 Massachusetts. Each lender sets its own rates and terms and must show you the APR before you sign.
- BadCreditMD is not a lender or broker and does not make loans or credit decisions. When you submit a request, a lending network partner shares it with third-party lenders, and those lenders or the partner may pay us a fee for each referral. The lenders decide whether to offer you a loan.
- There is no fee to use BadCreditMD. Lenders or our lending network partner may pay us.
- Lenders set their own rates, fees and terms. Offers depend on your credit, income, state of residence and each lender's criteria.
- Our service is not available in all states, and not every loan type is available in every state.
- By submitting a request you consent to lenders checking your credit, which may affect your score, and to your information being shared with them.
- Submitting a request does not mean you will be approved or funded, or that you will receive any particular amount or rate.
- Short-term loans are costly and are not a long-term financial solution. Borrow only what you can repay on time.
- BadCreditMD publishes general information about loans and state rules. It is not legal or financial advice.
- BadCreditMD is operated by BadCreditMD, LLC, 30 N Gould St Ste N, Sheridan, WY 82801. Contact: pr@badcreditmd.com. Full details are on our disclosures page and disclaimer.
- Questions about a lender licensed in Massachusetts? Contact the Massachusetts Division of Banks (DOB) or file a state complaint.
- You can submit a complaint about any lender to the Consumer Financial Protection Bureau at consumerfinance.gov/complaint.