Montana has enacted a number of laws to protect payday loan borrowers and creditors. For one, each cash advance lender is required to be licensed in the state. The maximum number of outstanding loans that a borrower can have at one time with the same cash advance lender is two. The amount of the two payday loans combined must not be greater than $300. Montana law sets the minimum amount for a cash advance loan at $50 plus fees. It prohibits loan splitting, the process whereby a creditor separates the payday loan into two with the intention of charging interest on each. The state provides for a civil remedy to cash advance businesses seeking to collect loans; they can proceed civilly against the borrowers in question. However, payday lenders are prohibited from instituting a criminal proceeding for loan collection purposes.
A borrower can request up to $300 plus fees in payday loan funds. A cash advance loan cannot be greater than 25% of a borrower's gross monthly income.
The loan term can range from 4 to 31 days.
A borrower is strictly prohibited from extending or rolling over a payday loan. However, a cash advance business may gratuitously extend a loan's term beyond the repayment date.
Fees are capped by the Montana legislature at 25% of the payday loan check's value. The finance fee for a two-week cash advance loan in the amount of $100 is $25.
The APR for a two-week loan valued at $100 loan is 650%.