(last updated 11/13/2019)
Minnesota Personal Loan Laws and Regulations in (MN)
48.153 INSTALLMENT LOANS; FINANCE CHARGES; MINIMUM CHARGES.
Subd. 1a. Authorized rate of interest charged by banks or banking associations.
A bank organized under the laws of this state, or a national banking association doing business in this state, making a loan of money not exceeding $40,000 repayable in installments, may charge, at the time the loan is made, a rate of interest upon the unpaid principal balance of the amount financed of 12 percent a year, or the rate of interest authorized by section 48.195, whichever is greater. If the rate of interest charged is permitted by section 48.195at the time the loan is made, the rate does not later become usurious because of a fluctuation in the federal discount rate.
Subd. 3a.Authorized rate of interest charged by savings banks or associations.
A savings bank organized under chapter 50, a savings association subject to the provisions of sections 51A.01 to 51A.57, or a savings association chartered under the laws of the United States, that has its principal place of business in this state, may make a loan for consumer purposes to a natural person in an amount not exceeding $25,000 repayable in installments, and may charge a rate of interest upon the unpaid principal balance of the amount financed of 12 percent a year, or the rate of interest authorized by section 48.195, whichever is greater. If the rate of interest charged is permitted by section 48.195 at the time the loan is made, the rate does not later become usurious because of a fluctuation in the federal discount rate.
Charges in reference to installment loans under this section shall be computed and collected only on the unpaid principal balance of the amount financed actually outstanding. One day's finance charge means an amount equal to 1/365 of the per annum rate provided for in an installment loan. If the total finance charge determined on an installment loan, single payment or demand loan shall be less than $10 the amount charged may nevertheless be $10. No loan shall be made pursuant to this section if over 50 percent of the proceeds of the loan are used to finance the purchase of a borrower's primary residence other than a manufactured home.
Subd. 3.Finance charge for loans.
(a) With respect to a loan, including a loan pursuant to open-end credit but excluding open-end credit pursuant to a credit card, a financial institution may contract for and receive a finance charge on the unpaid balance of the principal amount not to exceed the greater of:
(1) an annual percentage rate not exceeding 21.75 percent; or
(2) the total of:
(i) 33 percent per year on that part of the unpaid balance of the principal amount not exceeding $1,125; and
(ii) 19 percent per year on that part of the unpaid balance of the principal amount exceeding $1,125.
This information is for informational purposes only. Although care has been taken to accurately describe the laws and regulations in Minnesota, no guarantees are implied or expressed about its accuracy. This is not legal advice. If you need legal advice, please consult an attorney or the Minnesota Department of Commerce.
The following classes of lending organizations may be exempt from some, all or none of the regulations and laws set by the state of Minnesota. Federally chartered banks, state chartered banks, credit unions and some entities organized under the laws of a sovereign nation (for example) a Native American Tribe or the country of Antigua.