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Personal Loans in Maryland: What You Need To Know

Have you considered taking out a personal loan in Maryland? A personal loan is a great way to manage financial emergencies when they happen.

Depending on your eligibility, you may be able to borrow small or large loan amounts without the need to put forward any collateral.

Why do people borrow personal loans in Maryland?

Personal loans can help you recover from unexpected expenses. They can also help you replace immediately-due expenses with a loan that can be paid in predictable, monthly installments like a credit card.

Many MD residents choose personal loans so that they can avoid credit cards or pay off credit card debts - taking advantage of a significantly reduced APY.

Taking out a loan isn't always risky to your credit history.

Debt consolidation can be a powerful tool to lock in monthly savings on interest. When used this way, they can help you close lines of credit, payday loans, or other loans that do not typically have low rates.

The best personal loans (in other words, the ones that let you make the loan payments on time without stress) can help you develop credit if you don’t yet have a financial history. Making regular payments can slowly propel your score upward over time.

Here's you’ll learn:

  • Why get a personal loan in Maryland?
  • What do Maryland laws say about loans?
  • What to consider before getting a personal loan in Maryland

Let's review Maryland's lending regulations.

What do Maryland laws say about loans?

"It makes no sense to pay higher rates than you have to..."

Maryland has a long history of carefully managing loan providers and repayment terms within its borders. Some of the laws that govern lending are taken directly from the state's constitution.

Loan rules are largely determined by state law rather than local law. That means you won't have to worry about different terms if you complete the application process in Baltimore, Columbia, Germantown, or other MD cities.

Rules for Lending in Maryland:

  • Legal interest is capped at 6-8% - In the state of Maryland, legal interest is capped at 6% for most general loans (Const. Art. III §57). However, parties may agree to an interest rate of up to 8% by contract (Com. Law §12-103).
  • There are strong laws against illegal interest rates - Maryland has passed some strong laws to protect borrowers from illegal loan rates. Anyone who charges an illegal interest rate may be ordered to forfeit 3x the amount of excess interest and charges collected, whichever is greater (Com. Law §12-114).

Important exceptions to lending laws in Maryland

The following types of loans are not necessarily covered by the standard interest law. Instead, other specific laws may apply.

  • Mortgage secured loans (see: Com. Law §12-103)
  • Unsecured loans secured by other than savings (see: Com. Law §12-103)
  • Installment loans not secured by real property (this may include some unsecured personal loans. see: Com. Law §12-103)
  • Open-end retail accounts (see: Com. Law §12-506)
  • Installment sales contract for motor vehicles and other consumer goods (see: Com. Law §12-609, 610)

What to consider before getting a personal loan in Maryland

Maryland’s strong lending laws can help you protect yourself when you borrowing money. However, you still need to be thoughtful about what you want from a loan, and how likely it is that you’ll be able to repay it on time.

Late payments and defaults can have serious consequences that may not be worth the risk of some extra cash right now. You should take the following steps to make sure that you don’t end up over your head.

Only borrow what you need

If you have an emergency expense, try not to borrow more than you need to cover it. Naturally, there are a lot of things you’ll want when there’s a possibility that you’ll come into a windfall of cash. However, borrowing the maximum loan amount is often unnecessary.

Remember that with each extra amount you borrow, you may be looking at months or even years of extra payments as the interest builds up over the loan term. Borrowing no more than what you need can save you a significant amount of stress over the life of the loan.

Always do research and take a look at all your options

Even when you’re only considering different personal loans, there is a significant amount of variety. When you're searching, you want to look for lenders who can meet your needs. That might mean you want flexible terms, or the lowest rate, or consideration despite issues with bad credit.

Be aware that lenders may use different rules to determine who is eligible for loans, or what interest rate they may qualify for. You may qualify for a loan with some lenders, even if that loan has the same terms as one from a lender that turned you down.

Different lenders, including online lenders, may have different rules when it comes to situations like late payments or changing the monthly payment date. Research can help you avoid a lot of stress that may occur from surprises.

Ask plenty of questions

You should make sure that you ask your loan officer plenty of questions about the loan you are taking out. This habit can help you avoid getting blindsided by unexpected terms.

"The state of Maryland has a number of strong protections for borrowers..."

Always be sure to ask what words on the loan application mean if you don’t understand them. Financial terms that appear on loan offers may have a different meaning than some of the same words that are used in day-to-day conversation.

Here are some examples of questions you can ask:

  • What is the interest rate?
  • Are you going to check my credit today? (Too many credit checks in a short time can affect your credit score)
  • Is the interest rate permanent or variable?
  • What is the total amount I will pay over the life of the loan?
  • Will I be charged any origination fees today?
  • Is there a prepayment penalty (a fee for paying the loan off early)?


Choose the Best Option for Your Budget and Goals

Borrowing responsibly starts with understanding financial needs and budget.

When you have already done the leg work up front, it puts you in the position to evaluate offers for the best fit.

Today's rates are historically low, making it an opportune time to consider financing options. At the same consumer credit rates haven't really fallen for most people.

All this makes a personal loan in Maryland worth considering if you are carrying credit card debt and would like to cut your expenses fast.


"Imagine how fast could you pay off your balances if your monthly payments were cut in half overnight..."
Debt Consolidation Companies
  • Stop Being Strangled By Interest
  • Creates More Disposable Income
  • Buys You Room To Breathe

The responsibility is yours to take action. Create a plan to manage your debts with reasonable goals and have reasonable expectations. Lending may or may not be the answer to your unique situation, calculate, and let the numbers guide you.

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