Payday Loans are NOT Legal in Arkansas

Beware of predatory lending

Payday Lenders in Arkansas

Payday loans, often referred to as short-term cash advances or paycheck advances, have been rendered illegal in Arkansas under the provisions of the state’s Constitution. The Arkansas Check Cashers Act, enacted in 2008 through a voter-approved ballot initiative, effectively eradicated payday lending throughout the state. This legislation imposes a cap of 17% per annum on the interest rate that lenders can charge on consumer loans, rendering payday loans nonviable within the legal framework of Arkansas. By implementing these regulations, Arkansas has taken significant steps to shield its residents from the detrimental impact of exorbitant interest rates and the debt cycles frequently associated with payday loans.

While payday lending is prohibited in Arkansas, residents must remain vigilant to the risks posed by online lenders and potential scams. Unscrupulous individuals may attempt to exploit borrowers through illegitimate online platforms. To safeguard themselves, Arkansas residents should exercise caution, verifying the authenticity of lenders, ensuring proper licensing, and meticulously reviewing the terms and conditions before entering into any online loan agreements. By maintaining awareness and staying informed, individuals can protect themselves from fraudulent practices, making sound financial choices in compliance with Arkansas law.

Payday Loan Laws

Payday loans are strictly prohibited in the state of Arkansas. The Arkansas Constitution caps the interest rate on consumer loans, including payday loans, at 17% per annum. This legal restriction, established by the Arkansas Check Cashers Act in 2008, effectively eliminated the payday lending industry in the state. Lenders are prohibited from charging exorbitant interest rates and fees commonly associated with payday loans. Arkansas residents are protected from the predatory practices of payday lenders.

Loan Terms and Conditions

prohibited

Whenever you need emergency financing, you can get loans online from a legit lending companies. Check your rates and terms before applying for cash advance online.

History of Arkansas Payday Loans

In the late 1990s, Arkansas witnessed the passage of the Check Cashers Act by the state Legislature, aimed at regulating the check cashing and deferred presentment transactions industry. However, this well-intentioned legislation inadvertently gave rise to the exploitation of payday lending practices in Arkansas, as it provided a legal framework for usurious loans. The payday loan industry faced a significant blow on November 6, 2008, when the Arkansas Supreme Court deemed the Check Cashers Act unconstitutional, effectively rendering payday loans illegal in the state. Subsequently, the Arkansas Attorney General took proactive measures, issuing cease and desist letters to registered Check Cashers and cracking down on illegal brokers. Consequently, payday loans officially remain prohibited in Arkansas.

State Resources

How to file a complaint

Complaints against payday lenders can be by submitting on online form through the Attorney General’s office.

Arkansas Loans Debt Relief

How to Get out of Loan Debt?

Escaping the burden of loan debt in Arkansas requires careful planning and disciplined financial management. Start by creating a budget that outlines your income and expenses, enabling you to identify areas where you can cut back and allocate more funds towards debt repayment. Consider reaching out to your lenders to negotiate lower interest rates or more flexible repayment terms. Exploring debt consolidation options may also be beneficial, allowing you to combine multiple debts into a single, more manageable payment. Additionally, seek guidance from credit counseling agencies or financial advisors who can provide expert advice on debt management strategies. It’s important to stay committed to your repayment plan and avoid taking on new loans or incurring further debt. With patience and determination, you can regain control of your finances and work towards a debt-free future.

Support Resources

Types of Quick Loans in Arkansas

Payday Alternative Loans In Arkansas, where traditional payday loans are prohibited, residents have an alternative option known as payday alternative loans (PALs). PALs are small-dollar loans offered by federal credit unions to provide consumers with a safer and more affordable borrowing option. These loans typically have lower interest rates, longer repayment terms, and more flexible eligibility requirements compared to traditional payday loans. PALs offer a viable alternative for individuals who need quick access to funds but want to avoid the high costs and potential debt traps associated with payday loans. Arkansas residents can explore PALs as a responsible and regulated option to meet their short-term financial needs.

Installment Loans Installment loans are a valuable borrowing option for Arkansas residents in need of small cash amounts, allowing them to repay the loan over a set period through monthly installments. Lenders may also provide flexible repayment options, including adjustable dates and amounts, as well as the option to make early repayments without incurring penalties, offering borrowers greater control over their financial obligations.

Line of Credit Loans For Arkansas residents seeking a flexible borrowing solution, Line of Credit Loans can provide a revolving credit line that can be accessed up to a predetermined limit. This credit line, established upon approval, allows borrowers to withdraw funds as needed, with interest only charged on the amount utilized. Line of Credit Loans in Arkansas may be offered as either secured or unsecured, providing individuals with the flexibility to choose the most suitable option for their financial needs.

Alternatives to Payday Loans in Arkansas

Personal Loans

Personal loans provide a versatile financial solution for various purposes in Arkansas, such as consolidating debt, funding home improvements, or covering unexpected expenses. Unlike secured loans, personal loans in Arkansas are typically unsecured, relying on the borrower's credit rating for approval. The interest rates of personal loans vary based on factors like income and credit scores. Banks, credit unions, and online lenders serve as potential sources for obtaining personal loans, making it essential to compare rates and fees to ensure compatibility with the borrower's financial situation.

Land Loans

Land loans in Arkansas offer financing options for individuals looking to purchase or refinance land, whether for residential or agricultural purposes. These loans are specifically designed to provide funds for acquiring undeveloped property, allowing borrowers to fulfill their dreams of building a home or starting a farm. Land loans typically come with shorter repayment terms and higher interest rates compared to traditional mortgages. Lenders may require a substantial down payment and thorough evaluation of the property's value and potential use. Arkansas residents seeking land loans should carefully consider their financial capabilities and explore lenders that specialize in this type of financing to secure the best terms and maximize their investment opportunities.

Construction Loans

When it comes to construction projects in Arkansas, construction loans offer short-term financing to cover material costs, labor expenses, and other construction-related expenditures. Lenders may have varying terms and conditions, often requiring a minimum of 20% down payment upfront. Eligibility for construction loans is determined by the borrower's creditworthiness and ability to repay the loan on time, highlighting the importance of maintaining a favorable credit history.

Bad Credit Loans in Arkansas

Arkansas residents with bad credit can explore bad credit loans tailored to their specific needs. These loans are designed for individuals with low credit scores or limited credit histories. Due to the higher associated risks, lenders may impose higher fees and interest rates, and the loan amounts may be relatively smaller. While secured bad credit loans may require collateral such as a vehicle or savings account, unsecured options do not have such collateral requirements. It is crucial for borrowers with poor credit to carefully compare fees and terms to ensure they can manage the costs effectively.

Arkansas Small Business Loans

Arkansas provides several types of small business loans with different requirements and terms:

SBA loans: Loans that are backed by the U.S. Small Business Administration, which offer lower interest rates and longer repayment terms than conventional loans.
Arkansas Women's Business Center (AWBC): The AWBC offers various resources, training, and access to capital for women-owned businesses in Arkansas. They provide assistance in securing loans and navigating the funding landscape, along with other support services.
Arkansas Capital Corporation: Arkansas Capital Corporation (ACC) provides small business loans and financial solutions to businesses throughout the state. They offer various loan programs, including the Small Business Loan Guarantee Program and the Arkansas Rural Loan Guarantee Program, to help businesses access capital for growth and expansion.
Business Lines of Credit: A business line of credit provides a revolving credit line that can be drawn upon as needed, up to a certain credit limit. These loans can be useful for businesses that experience seasonal fluctuations in revenue or have unpredictable cash flow.
Microloans: These loans are designed for small businesses that need a smaller amount of funding, typically up to $50,000. The funds can be used for working capital, equipment, inventory, and other expenses.

VA loans in Arkansas

For veterans and active-duty military members in Arkansas, VA loans provide a beneficial opportunity to secure homeownership with minimal or no down payment requirements. Backed by the U.S. Department of Veterans Affairs, VA loans offer advantages like lower interest rates and the exclusion of private mortgage insurance. Furthermore, these loans feature more flexible qualification criteria, making them accessible to individuals who may face challenges meeting traditional loan standards. To qualify for a VA loan, borrowers must meet specific service requirements and hold a valid Certificate of Eligibility.

Arkansas Student Loans

Many options are available to Arkansas students to help finance their college education. These options include:

Federal Student Loans: Loans provided by the federal government offering low-interest rates and flexible repayment plans.
Arkansas Rural Nursing Education Consortium Loan Program: This program offers loans to Arkansas residents who are pursuing nursing education in rural areas of the state. The loans are forgivable if the recipient works as a nurse in a rural community in Arkansas for a specified period after graduation.
Arkansas Teacher Opportunity Program: Provides financial assistance to Arkansas residents who are pursuing a career in teaching. The program offers forgivable loans to recipients who agree to teach in Arkansas public schools in high-demand subject areas or geographic regions.
Private Student Loans: Loans from private lenders, they commonly have higher interest rates and may require a co-signer.

Arkansas Income Information

According to the 2021 U.S. Census, Arkansas had a median household income of $52,123, significantly lower than the national median of $69,021. With a thriving blend of industries including agriculture, manufacturing, healthcare, retail, and tourism, Arkansas sustains a robust and multifaceted economy. The poverty percentage in Arkansas in 2021 was 16.3%. Median household income and poverty levels vary significantly by county in Arkansas, with Benton County having the highest median income at $71,156, and Lee County having the lowest at $27,902.

United States Census Bureau. “Poverty in the United States: 2021.” Accessed on May 12, 2023.
United States Census Bureau. U.S. Census Bureau QuickFacts: Arkansas . Accessed on May 12, 2023.

Arkansas Payday Lender Complaints

Below are trends associated with the top payday lenders in Arkansas, as reported to the Consumer Financial Protection Bureau.

Company Name	Count
MNE Services, Inc	6
Delbert Services	6
ENOVA INTERNATIONAL, INC.	4
CASHCALL, INC.	2
CNG FINANCIAL CORPORATION	2
Populus Financial Group, Inc. (F/K/A Ace Cash Express)	2
Total Complaints	53

Consumer Financial Protection Bureau. Consumer Complaint Database. Accessed on May 12, 2023.

Most Common Issues

Complaint type	Count
Charged unexpected interest or fees	14
Struggling to pay loan	11
Can’t contact lender	8
Received a loan didn’t apply for	7
Approved for loan but did not receive	4

What are the main reasons Americans apply for payday cash advance online or offline

Payday loans are typically used for nonnegotiable everyday expenses like your rent, utilities, and groceries. Per data reported by Pewtrust, the percentage of reasons described below

Reason	Share
Regular Expenses (Utilities, car payment)	53%
Unexpected emergency/expense	16%
Rent/Mortgage	10%
Something Special	8%
Other	5%
Did not answer	2%

Payday Lenders by City

Little Rock
Fayetteville
Fort Smith
Springdale
Jonesboro
Rogers
North Little Rock
Conway
Bentonville
Pine Bluff

Hot Springs
Benton
Sherwood
Bella Vista
Texarkana
Jacksonville
Paragould
Russellville
Cabot
West Memphis

Van Buren
Searcy
Bryant
Maumelle
El Dorado
Centerton
Siloam Springs
Hot Springs Village
Marion
Blytheville

Frequently Asked Questions

Are online payday loans legal in Arkansas?

No, online payday loans are not legal in Arkansas. Payday lending is prohibited in the state under the Arkansas Constitution.

Can I get a payday loan from a tribal lender?

No, tribal lenders are also prohibited from offering payday loans in Arkansas. The state law applies to all lenders, including tribal entities.

Are there any exceptions to the payday loan ban?

No, there are no exceptions to the payday loan ban in Arkansas. Payday lending is completely prohibited, and there are no loopholes or special circumstances that allow for its legality.

Can I take out a payday loan from a neighboring state if I live?

While it may be possible to access payday loans in neighboring states, such loans would still be subject to the laws and regulations of the state where they are obtained. Arkansas residents should be cautious and aware that bringing a payday loan back into Arkansas for repayment would still be in violation of the state’s ban.

What are the consequences for payday lenders operating illegally?

Payday lenders operating illegally in Arkansas can face severe consequences, including legal penalties and enforcement actions by regulatory authorities. These actions may involve fines, license revocation, and even criminal charges.

What should I do if I have been a victim of a payday loan scam?

If you have been a victim of a payday loan scam in Arkansas, it is important to report the incident to the Arkansas Attorney General’s Office or the Arkansas Department of Finance and Administration. They can provide guidance on how to proceed and take appropriate action against the scammers.