It’s a simple question: what’s the maximum interest rate that can be charged in Minnesota? The answer is surprisingly complicated because of competing federal and state laws--as well as numerous carve-outs and exceptions--and always requires a close examination of who the creditor is and what type of financial product is involved. With that disclaimer out of the way, here are some general interest rate guidelines in Minnesota:
Credit cards
If issued by a Minnesota-chartered financial institution: 18% APR
If issued by a National Bank or state-chartered bank outside of Minnesota: whatever the maximum interest rate in the financial institution’s home state
If issued by a state or federal credit union: 18% APR
Most loans
If issued by a Minnesota-chartered financial institution: 21.75% APR
If issued by a National Bank or state-chartered bank outside of Minnesota: whatever the maximum interest rate in the financial institution’s home state
If issued by a state of federal credit union: 18% APR
Auto loans
If the vehicle is no more than one-model year old: 18% APR
If the vehicle is two to three model years old: 19.75% APR
If the vehicle is three or more model years old: 23.23% APR
Small dollar or short-term loans, like earned wage access or payday loans
If the loan is for less than $1,300 and requires a payment of 25% or more within 60 days: 36% or between 37-50% if lender performs an ability to repay analysis
If loan is for $350 or less and repayable in a single installment: 36% or between 37-50% if lender performs an ability to repay analysis
Again, these are general guidelines and a careful analysis is required of your specific financial product before determining whether the interest rate is illegal.