How expensive may a payday loan legally be in Latvia?
The cap is 0.07% a day — and it is written into the law. Since 1 July 2019 the total cost of credit to a consumer may not exceed 0.07% per day of the loan amount. And “total cost” means absolutely everything: interest, commissions, servicing and arrangement fees — not just the figure the advert calls the interest rate. You can check it yourself with a simple formula: (total repayable − loan amount) ÷ number of days ÷ loan amount × 100. If the result exceeds 0.07, the cost of the contract does not comply with the law, and you can complain about it. Pawnbrokers are the exception: the cap does not apply to contracts where an item is handed over as security and the consumer's liability is limited to that pledged item alone.
📋 The rules
- Total cost: up to 0.07% per day
- In force since 1 July 2019
- Includes all fees and commissions
- The formula lets you check it yourself
- Supervised by PTAC
🔓 Exceptions
- The cap does not apply to pawnbroker-type loans against a pledged item
- Credit may only be issued by a licensed consumer credit provider
- The lender must assess your creditworthiness before lending
⚠️ Penalties & fines
Check the lender before you sign. Consumer credit may only be provided by a licensed lender, and licensed lenders are supervised by the Consumer Rights Protection Centre. If a lender is not on the list, it may not lend to you at all, whatever the advertising promises. The second step is the arithmetic: if (repayable − loan) ÷ days ÷ loan × 100 exceeds 0.07, the cost breaches the statutory cap, and you can complain to PTAC. Third: the lender must assess your creditworthiness before lending — where that was not done, the breach is the lender's, not yours, and it matters in any dispute. And remember the pawnbroker exception: where liability is limited to the pledged item, the cap does not apply — but neither does the debt exceed that item.
📎 Official sources
- PTAC · Consumer credit →
- likumi.lv · Regulations on consumer credit →
- LV portāls · The cap on total credit cost →
❓ Frequently asked
How high may the cost of credit be?
The total cost of credit to a consumer may not exceed 0.07 percent per day of the loan amount. The cap has applied since 1 July 2019 and covers all charges together, not just the interest.
What counts as the total cost?
Everything you pay for the credit — interest, commissions, servicing and arrangement fees, not merely the rate quoted in the advertising. That is why the advertised figure and the true cost so often diverge sharply.
How do I check whether the cost is lawful?
Use the formula: total repayable minus the loan amount, divided by the number of days in the contract, divided by the loan amount, times one hundred. A result above 0.07 means the cost exceeds the legal cap.
Does the cap apply to pawnbrokers?
It does not. The cap does not apply to contracts where an item is given as security and the consumer's liability is limited to that pledged item alone, rather than to all of their property.
What if the cost is too high?
Turn to the Consumer Rights Protection Centre, which supervises credit providers. First check whether the lender holds a licence to provide consumer credit services in Latvia at all.
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