Two class action lawsuits against Cash Converters have been settled out of court, which will see partial refunds of thousands of customers who were charged up to 633 per cent interest on loans.

Australia's biggest payday lender reached an in-principle $23 million settlement with legal firm Maurice Blackburn on behalf of 37,500 of the company’s past clients.

Maurice Blackburn argued Cash Converters sought to dodge a 48 per cent interest rate cap for loans in NSW by making its clients sign a document imposing big “deferred establishment fees” if loans were not repaid early.

“Cash Converters used a method where people were asked to sign a number of documents including an early repayment election,” Maurice Blackburn NSW managing principal Ben Slade told reporters this week.

“For cash loans it was 633 per cent, and for personal loans 145 per cent.”

It is expected that borrowers will be repaid the deferred establishment fees plus interest, if the settlement gets Federal Court approval.

Refunds should cover anyone who took out a Cash Converters loan from June 2010 to July 2013.

But the settlement agreement is not an admission of liability by Cash Converters.

Mr Slade says that after a legal change in July 2013, there was no evidence Cash Converters had behaved improperly.

“There's a lot of disquiet about payday lenders... There should be disquiet,” he said.

“There are a number of strategies used by payday lenders to profit in spite of constraints in consumer protection legislation and the Government should take a very careful look at what the payday lending industry is doing.”

Shares in Cash Converters rose 2.2 per cent after the announcement.

In a statement to the ASX, the company says it will put up a $20 million fund for the repayments, while capping its legal costs at $3 million.