Payday Loans are Legal in Hawaii

Beware of predatory lending

Payday Lenders in Hawaii

Payday loans, also known as short-term, high-cost loans, have been rendered illegal in the beautiful state of Hawaii, replaced by installment loans. The law mandates that consumer lenders must be licensed and adhere to the new small dollar loan and installment loan provisions, and are given the option to convert their licenses to the new installment loan model as part of their business. Starting from January 1, 2022, these regulations have capped interest rates at 36% APR and implemented stricter guidelines on loan terms and fees. This decisive action by Hawaii’s legislature reflects the commitment to safeguarding its residents from the harmful effects of payday loans. According to the Hawaii Department of Commerce and Consumer Affairs, payday lenders in Hawaii charged an average annual interest rate of approximately 459%, highlighting the urgent need for this legislation.

Residents of Hawaii must exercise caution, especially when dealing with online lenders, to avoid falling victim to scams. While payday loans are prohibited in Hawaii, predatory online lenders may attempt to circumvent the law and target unsuspecting borrowers. It is crucial for individuals to be vigilant and recognize the signs of fraudulent online lending practices. These scams often involve deceptive practices, such as unauthorized withdrawal of funds, misleading terms, and excessive interest rates. To protect themselves, residents of Hawaii should verify the legitimacy of lenders, carefully review loan agreements, and report any suspicious activity to the Hawaii Department of Commerce and Consumer Affairs.

Payday Loan Laws

In Hawaii, payday loans are prohibited by law but small dollar loans are still legal in the form of installment loans, which have longer terms and lower allowable fees and interest rates. The state passed legislation in 2021 known as Act 056, which prohibits payday lending and imposes regulations on small-dollar installment loans. Under this law, lenders are prohibited from offering payday loans to consumers in Hawaii. Act 056 establishes clear guidelines and safeguards, such as limiting interest rates and fees, setting loan terms, and requiring lenders to provide clear and accurate loan disclosures.

State Loan Terms and Conditions

Maximum loan amount: $1500

Maximum Interest Rate: 36%

Minimum loan term: 2 Months for loans less than $500, 4 months for loans over $500

Maximum loan term: 12 months
Number of rollovers allowed: None

Finance charges: Up to $35 dollars but cannot exceed half the original amount borrowed

Legal action: 6 Years

Certified Payday Lenders in Hawaii

Company Name	Company score	License Status
CURO Intermediate Holdings	7.9	Valid
Rosebud Economic Development Corporation	7.8	Valid
Tribal Lending Enterprise, Inc.	7.6	Valid
Risecredit, LLC	7.6	Valid
LDF Holdings, LLC	7	Valid
COMMUNITY CHOICE FINANCIAL, INC.	6.5	Valid

History of Hawaii Payday Loans

Hawaii has a notable history regarding payday loans. Until recently, the state allowed payday lending, subject to certain regulations. However, recognizing the need for consumer protection, Hawaii passed new legislation in 2021 to prohibit payday loans and implement regulations for small-dollar installment loans. This progressive move makes Hawaii the latest state to take a stand against exploitative lending practices. The law, known as Act 056, establishes stricter guidelines and safeguards for borrowers, ensuring fair and transparent lending practices. By passing this legislation, Hawaii aims to promote responsible lending, protect consumers from excessive fees and interest rates, and provide viable alternatives to payday loans in the state.

State Resources

How to file a complaint

Borrowers can submit complaints to the Department of Finance and Consumer Affairs on their website or by mail. They outline the steps that should be taken with the lender before filing a complaint.

Hawaii Loan Debt Relief

How to Get out of Loan Debt?

Escaping the burden of loan debt in Hawaii requires a strategic approach and proactive financial management. Begin by creating a comprehensive budget that prioritizes debt repayment and reduces unnecessary expenses. Seek assistance from reputable credit counseling agencies, such as the Hawaii State Office of Consumer Protection or the Hawaii Credit Union League, for expert guidance and resources to develop a personalized debt repayment plan. Explore debt consolidation options tailored to the unique needs of Hawaii residents. Additionally, take advantage of financial education programs and workshops offered by organizations like the Hawaii Department of Commerce and Consumer Affairs to enhance your financial knowledge and skills. With determination and the support of these valuable resources, you can navigate your way to a debt-free future in Hawaii.

Support Resources

Types of Quick Loans in Hawaii

Payday Alternative Loans Payday Alternative Loans (PALs) in Hawaii offer a lifeline to individuals in need of financial support, serving as a responsible alternative to traditional payday loans. PALs, available through select credit unions, provide borrowers with small, short-term loans that come with more favorable terms and lower interest rates. These loans are designed to protect borrowers from the predatory practices commonly associated with payday lending, offering greater flexibility and peace of mind.

Installment Loans When it comes to finding financial solutions in Hawaii, installment loans provide a flexible approach to repayments, tailored to individual creditworthiness. Whether it involves consolidating debts, addressing home repairs, or managing unexpected expenses, installment loans in Hawaii offer competitive interest rates and extended repayment terms. These loans empower borrowers with the financial freedom and control they need to overcome financial challenges and achieve their goals.

Lines of Credit Residents of Hawaii can benefit from lines of credit, which provide a convenient revolving credit line that can be utilized as needed, up to a predetermined limit. With lines of credit, borrowers have the flexibility to withdraw funds when necessary, while only incurring interest charges on the amount utilized. This makes them an attractive solution for managing cash flow and addressing financial needs as they arise in Hawaii.

Alternatives to Payday Loans in Hawaii

Personal Loans

In Hawaii, personal loans provide individuals with a versatile financial tool to meet various needs, such as debt consolidation, home improvements, or unexpected expenses. Interest rates for personal loans in Hawaii are influenced by factors such as credit score, income, and loan amount. Repayment terms can be customized to fit the borrower's specific requirements, ranging from several months to several years. Hawaii residents can obtain personal loans from banks, credit unions, online lenders, and other financial institutions, ensuring a competitive market that encourages borrowers to compare rates and fees for the best loan terms.

Land Loans

For individuals in Hawaii looking to purchase or develop land, land loans offer a financing option tailored to their needs. Whether for residential, commercial, or agricultural use, land loans provide borrowers with the necessary funds secured by the land itself. The interest rates on land loans in Hawaii can be fixed or adjustable, depending on factors such as creditworthiness, loan amount, and property type. These loans enable borrowers to pursue their land-related projects and ventures, supporting the growth and development of the local community.

Construction Loans

Hawaii residents embarking on construction projects can turn to construction loans to finance the building of their homes or commercial properties. These short-term loans cover expenses such as materials, labor costs, and other construction-related expenditures. Loan terms and conditions may vary among lenders, but typically require a minimum down payment of 20% as an upfront cost. Borrowers in Hawaii must demonstrate good credit and provide evidence of their ability to repay the loan within the agreed timeframe. Construction loans play a vital role in facilitating new construction and infrastructure development across the islands, contributing to the growth and prosperity of the state.

Bad Credit Loans in Hawaii

Individuals in Hawaii with poor credit scores or limited credit histories have the option to explore bad credit loans as a potential solution. These loans are specifically designed to cater to borrowers facing credit challenges, providing them with an opportunity to access funds when traditional loans may not be available. Borrowers should carefully compare the terms and fees of different lenders in Hawaii to ensure they select the most suitable option. Responsible evaluation of loan terms and timely repayment can help borrowers rebuild their credit scores over time, ultimately improving their financial standing.

Hawaii Small Business Loans

Small business loan options in Hawaii:

SBA loans: The SBA offers a variety of loan programs, including 7(a) loans, 504 loans, and microloans, to help small businesses access funding for things like, such as working capital, equipment purchases, and real estate investments.
Native Hawaiian Revolving Loan Fund (NHRLF): NHRLF is administered by the Council for Native Hawaiian Advancement (CNHA) and provides financial assistance to Native Hawaiian entrepreneurs. They offer low-interest loans and technical assistance to support business growth and development within the Native Hawaiian community.
Hawaii Community Lending (HCL): HCL is a non-profit community lender dedicated to supporting small businesses in Hawaii. They offer small business loans with flexible terms and affordable interest rates, with a focus on helping underserved communities and minority-owned businesses.
Business Expansion Loans: These loans are intended to help businesses expand their operations, whether through purchasing new equipment, renovating existing facilities, or increasing working capital.
Microloans: Microloans are small, short-term loans typically offered by non-profit organizations or community development financial institutions (CDFIs). They can be used for various business purposes, such as purchasing inventory or equipment.

VA loans in Hawaii

Hawaii veterans and active-duty military members have access to VA loans, a mortgage option specifically designed to support their homeownership goals. VA loans offer several advantages over traditional loans, including lower interest rates, no down payment requirement, and no private mortgage insurance obligation. Additionally, VA loans have more flexible qualification requirements, making homeownership more accessible to veterans and active-duty service members who may face challenges meeting the criteria of conventional loans. Eligibility for VA loans in Hawaii depends on meeting specific service requirements and obtaining a Certificate of Eligibility.

Hawaii Student Loans

Many options are available to Hawaii students to help finance their college education. These options include:

Federal Student Loans: Students in Hawaii can apply for federal student loans by completing the Free Application for Federal Student Aid (FAFSA). These loans include Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans. Federal student loans offer competitive interest rates and flexible repayment options.
Hawaii Community Foundation Scholarships: The Hawaii Community Foundation offers a range of scholarships to students in Hawaii. These scholarships provide financial assistance for various educational pursuits, including college and vocational training.
Hawaii Community Foundation Student Loans: The Hawaii Community Foundation offers student loans specifically for Hawaii residents. These loans provide financial assistance to eligible students pursuing higher education in Hawaii or on the mainland. They offer low-interest rates and flexible repayment options.
Private Student Loans: Loans offered by private lenders that can be used to pay for education expenses, with interest rates and terms that can vary widely.

Hawaii Income Information

The recently released 2021 U.S. Census reports show Hawaii having a median household income of $88,005, somewhat lower than the national median of $69,021. Hawaii’s economy is heavily reliant on tourism, with the tourism industry contributing significantly to its GDP and providing employment opportunities for many residents. However, the state also faces income disparities, as the high cost of living coupled with lower wages, compared to the national average, pose challenges for many residents in achieving financial stability. Hawaii’s median household income varies only marginally by county, with Honolulu County being the highest at $87,722, only 5% above the state average and Hawaii County being the lowest at $65,401. The state’s poverty rate was 11.2% in 2021.

United States Census Bureau. “Poverty in the United States: 2021.” Accessed on May 12, 2023.
United States Census Bureau. U.S. Census Bureau QuickFacts: Hawaii. Accessed on May 12, 2023.

Hawaii Payday Lender Complaints

Below are trends associated with some payday lenders in Hawaii, as reported to the Consumer Financial Protection Bureau.

Company Name	Count
CURO Intermediate Holdings	3
Rosebud Economic Development Corporation	2
Tribal Lending Enterprise, Inc.	2
Risecredit, LLC	1
LDF Holdings, LLC	1
COMMUNITY CHOICE FINANCIAL, INC.	1
Total Complaints	26

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on May 12, 2023.

Most Common Issues

Complaint type	Count
Charged Unexpected fees or interest	6
Can’t stop withdrawals from bank	4
Charged bank wrong day or wrong amount	3
Payment not credited to account	2
Received a loan didn’t apply for	2

What are the main reasons Americans apply for payday cash advance online or offline

Payday loans are typically used for nonnegotiable everyday expenses like your rent, utilities, and groceries. Per data reported by Pewtrust, the percentage of reasons described below

Reason	Share
Regular Expenses (Utilities, car payment)	53%
Unexpected emergency/expense	16%
Rent/Mortgage	10%
Something Special	8%
Other	5%
Did not answer	2%

Payday Lenders by City

Urban Honolulu
East Honolulu
Hilo
Pearl City
Kailua CDP
Waipahu
Kaneohe
Ewa Gentry
Mililani Town
Kahului

Kapolei
Kihei
Mililani Mauka
Kailua CDP
Makakilo
Schofield Barracks
Wahiawa
Ocean Pointe
Wailuku
Halawa

Ewa Beach
Royal Kunia
Waianae
Waimalu
Lahaina
Maili
Nanakuli
Hawaiian Paradise Park
Kaneohe Base
Kaiminani

Frequently Asked Questions

Are online payday loans legal in Hawaii?

No, online payday loans are not legal in Hawaii. Payday lending is prohibited by state law, and this includes online lenders.

Can I get a payday loan from a tribal lender in Hawaii?

No, tribal lenders cannot offer payday loans in Hawaii. The state law applies to all lenders operating within its jurisdiction, regardless of their tribal affiliation.

Are there any exceptions to the payday loan ban in Hawaii?

No, there are no exceptions to the payday loan ban in Hawaii. The state law prohibits all forms of payday lending, ensuring consumer protection and preventing exploitative lending practices.

Can I take out a payday loan from another state if I live in Hawaii?

No, you cannot take out a payday loan from another state if you live in Hawaii. The payday loan ban in Hawaii applies to all residents, regardless of where the loan is obtained.

What are the consequences for payday lenders operating illegally in Hawaii?

Payday lenders operating illegally in Hawaii may face severe consequences. They can be subject to legal action, monetary penalties, and even license revocation by the state authorities.

What should I do if I have been a victim of a payday loan scam in Hawaii?

If you have been a victim of a payday loan scam in Hawaii, you should immediately report the incident to the Department of Commerce and Consumer Affairs, Office of Consumer Protection. They can provide guidance and assistance in resolving the issue and taking appropriate legal action against the fraudulent lender.