Ohio · State Guide
Personal Loans in Ohio: The Four-Statute Framework Borrowers Should Understand
Ohio regulates consumer lending through four distinct statutes, the Short-Term Loan Act, Consumer Installment Loan Act, Small Loan Act, and Second Mortgage Loan Act, each with its own rate caps and rules. House Bill 123 (2018) restructured the small-dollar market and capped short-term loans at 28%, but the lending landscape remains more complex than most states.
APR range (network)
6.99%–35.99%
28% APR
April 2019
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Ohio's Four Consumer Lending Statutes
Ohio’s consumer lending market is shaped by four separate statutes, each governing a different segment of the market. The most important reform of the past decade was House Bill 123 (2018), passed with bipartisan support, which restructured the Short-Term Loan Act to cap payday-style loans at 28% APR and reshape how lenders can charge fees.
The 28% cap originated from a 2008 ballot initiative supported by 63.6% of Ohio voters. For a decade, payday lenders evaded the cap through loopholes, most notably the Credit Services Organization (CSO) Act, which allowed brokering schemes that pushed effective APRs above 300%. HB 123 closed these loopholes and required all short-term lenders to operate under the modernized framework.
North Carolina CFA Tiered Rate Structure (Loans ≤ $12,000)
Statute
Loans Covered
Key Rate Provision
Short-Term Loan Act (HB 123)
Loans of $1,000 or less; terms ≤ 1 year
28% APR + limited fees
Consumer Installment Loan Act (CILA)
Closed-end and open-end consumer credit
Tiered structure; no statutory APR cap
Small Loan Act
Loans above $1,000 (post-HB 123)
25% maximum interest
Second Mortgage Loan Act
Subordinate residential loans
Various rate provisions
Source: Ohio Revised Code Chapters 1321 and 1322. For current statutory text and licensee directories, see Ohio Department of Commerce, Division of Financial Institutions. Network partners cap APRs at 35.99% nationwide.
Why the lending market in Ohio looks different now
Before HB 123, Ohio had over 800 payday and auto-title storefronts. By the end of 2019, that number had dropped to 246 licensed stores. The reform didn’t eliminate small-dollar lending, applications and originations actually increased at not-for-profit and traditional installment lenders, but it eliminated the highest-cost predatory products. Ohio Department of Commerce data shows the weighted average contracted rate on remaining short-term loans is around 148% (driven by the limited fees still permitted), compared to APRs over 400% before HB 123.
Ohio Market: What Borrowers Should Know
Ohio’s economy mixes major manufacturing centers (Cleveland, Akron, Toledo) with services hubs (Columbus, Cincinnati) and significant rural Appalachian regions. The lending market reflects this diversity, banks and credit unions dominate prime-credit lending, while licensed CILA and Small Loan lenders serve the subprime market within the state’s tighter rate framework.
$70,300
715
~7.0%
72%
Ohio voters have repeatedly demonstrated strong support for stricter rate caps. The 2008 ballot vote (63.6%) confirmed the original 28% cap, and 2020 polling found 72% support for a stricter 36% cap. Whether that policy gets enacted remains a legislative question, but it suggests Ohio’s regulatory direction continues to favor borrowers over high-cost lenders.
Consumer Protections Specific to Ohio
Department of Commerce licensing
The Ohio Department of Commerce, Division of Financial Institutions licenses lenders under all four consumer lending statutes. You can verify any lender via the Department’s online licensee search. Unlicensed lending is unenforceable, and the Department maintains active enforcement against violators.
HB 123's structural reforms
Beyond the 28% cap, HB 123 introduced several borrower protections specific to Ohio: licensees must require borrowers to sign a written declaration of eligibility; lenders cannot make concurrent short-term loans to the same borrower; and licensed installment lenders must follow strict disclosure requirements. The law also prohibited registered Credit Services Organizations from arranging loans under $5,000 or above 28% APR, closing a major loophole.
Online lending exemption
HB 123 specifically permitted online lending under the Short-Term Loan Act, ensuring that out-of-state online lenders cannot operate in Ohio without complying with the same 28% cap that applies to storefront lenders. This is a significant difference from many states where online operators evade local rate caps.
Military Lending Act
Ohio hosts Wright-Patterson Air Force Base and several Air National Guard installations. Active-duty servicemembers and dependents are covered by the federal Military Lending Act, capping most consumer APRs at 36% all-in. For most short-term loan products in Ohio, the state 28% cap is more restrictive than the federal MLA cap.
CSO loophole closure
If you’re being offered a loan in Ohio through a “Credit Services Organization” or any third-party broker arrangement that adds fees on top of a low base interest rate, verify carefully. Post-HB 123, CSOs cannot legally arrange loans under $5,000 or above 28% APR. Any such arrangement is likely a violation and the loan may be unenforceable.
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Common Uses for Personal Loans in Ohio
Home improvement
Ohio's older housing stock, much of it built mid-century, drives substantial home repair lending, especially in industrial cities.
Debt consolidation
Particularly common in major metros like Columbus, Cleveland, and Cincinnati where credit card balances accumulate.
Heating costs
Ohio winters are severe; some borrowers use personal loans to bridge heating costs not covered by federal assistance programs.
Auto-related expenses
Major repairs or down payments, especially in suburban areas with limited transit.
Manufacturing-sector layoff bridging
Ohio's industrial economy still produces periodic layoffs; personal loans sometimes bridge gaps before unemployment kicks in.
What Lenders in Our Network Look For
Typically $800/month minimum from verifiable sources.
All credit types considered. Some lenders work with scores starting at 580.
Usually below 45–50%.
For ACH funding and repayment.
Or other U.S.-recognized identification.
What funding actually looks like
After approval, funding typically arrives within 1 to 7 business days, depending on the lender and your bank’s ACH processing.
Ohio-Specific FAQ
What is the maximum APR on a personal loan in Ohio?
It depends on the loan type. Short-Term Loan Act loans (under $1,000, term ≤ 1 year) are capped at 28% APR plus limited fees. Loans above $1,000 typically operate under the Small Loan Act (25% maximum) or Consumer Installment Loan Act (varies). Network partners cap APRs at 35.99% nationwide, with most prime-credit Ohio borrowers seeing rates well below that.
Can I still get a payday loan in Ohio?
Payday-style loans still exist in Ohio, but they’re now structured under HB 123’s framework, capped at 28% APR with strict fee limits and a minimum 91-day term. The triple-digit APR products that operated before 2019 are no longer legal. The number of licensed short-term lenders dropped from 800+ to 246 after HB 123 took effect.
What happens if a lender violates Ohio lending laws?
Violations can render the loan unenforceable and expose the lender to civil penalties from the Ohio Department of Commerce. Borrowers can also pursue claims under Ohio’s Consumer Sales Practices Act. Report violations to the Department of Commerce or the Ohio Attorney General.
Are online lenders required to follow Ohio's 28% cap?
Yes. HB 123 specifically extended the 28% Short-Term Loan Act cap to online lending. Out-of-state online operators cannot evade Ohio’s framework simply by lacking a physical presence. Federally chartered banks may operate under separate authority, but non-bank online lenders must comply.
Why does Ohio have four separate consumer lending statutes?
The structure evolved over decades, with each statute originally addressing a different segment of the lending market. HB 123 partially modernized the framework but didn’t consolidate them, meaning lenders may still operate under whichever framework best fits their product. For borrowers, the practical effect is that you should always verify which statute governs your specific loan to understand the applicable consumer protections.
Sources & References
- Ohio House Bill 123 (2018) — Short-Term Loan Act reforms
- Ohio Revised Code Chapter 1321 — Consumer lending provisions
- Ohio Department of Commerce, Division of Financial Institutions — com.ohio.gov
- Policy Matters Ohio — Better Loans, Greater Security analysis
- Center for Responsible Lending — Ohio Bill Analysis (2018)
- U.S. Census Bureau — Ohio median household income (2024 ACS)
- Experian Consumer Credit Review — Ohio average FICO 715
- Federal Reserve G.19 Consumer Credit Report
- Military Lending Act, 10 U.S.C. § 987
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