Arkansas Payday Loans

Usury cap in Arkansas Constitution applies. Ark. Const. Amend. 89 § 3.
Status: Prohibited (Check Casher Act, Ark. Code Ann. 23-52-101 et. Seq., repealed 2011)

Payday Lending Laws in Arkansas

Since 2008, the State Attorney General's office has worked to eliminate all forms of payday lending in Arkansas, although there has been some resistance to these efforts. In October 2013, the Southwest Times Record reported the Attorney General had formally issued writs against Western Sky Financial and several other companies. This led to further arguments about the ruling, primarily stemming from Western Sky's ownership.

While current state regulations prohibit any payday lenders from physically operating within the state, businesses owned and operated by Native American tribes are insulated against the regulations due to tribal sovereign immunity. And while Western Sky's home offices are in South Dakota, the company argued tribal immunity.

The Attorney General countered that the company was not wholly owned or operated by a tribe and thus not eligible to claim tribal immunity. As of February 2017, any company operating in Arkansas claiming to offer payday lending services is doing so illegally.

What is a payday loan?

Payday loans are short-term loan types that have become popular in the last decade due to the easy application process and the small list of requirements to apply. The loans get their name from the relatively short time span between loan approval and the payback period, usually two weeks, that tend to coincide with the biweekly pay period commonly used by employers in the U.S. The loans generally allow a borrower to apply for a relatively small amount of money, which can be anywhere from $100 to $1,000 depending on the state, and do not carry any spending restrictions. That is, a borrower does not have to declare what the loan is for, freeing them to use it as they see fit.

To apply for cash advance loans in states where they are legal, a potential borrower only needs to be over the age of 18, be a U.S. citizen, and have access to a bank account. Payday loans do not require any collateral from the borrower to apply, and the borrower's credit history and debt level do not come into play during the application process. These factors add to the attractiveness of payday loans; if a borrower needs to address an unexpected financial emergency like home repair and does not have the credit or cash immediately available, they have the option of option of seeking a payday loan and paying it back within two weeks.

The easy application process and complete freedom of borrower usage, however, can lead to large problems if the borrower does not respect the terms of the loan. The biggest danger of payday loans is the trap of a debt cycle, wherein a borrower does not pay the loan back on time and gets hit with extra fees and charges and may feel inclined to take out additional loans to payback the original amount.

Other Loan Options

The primary option available to Arkansas residents seeking additional loan options for short-term financial troubles would be the internet. State regulations do not forbid potential borrowers from searching the internet for loan companies. This option is allowed due to a similar business structure used by credit card companies, which means a bank operating in Texas might be open to lending funds to an Arkansas resident.

Applying for such a loan does not guarantee loan approval, and a potential borrower should understand the loan terms before agreeing to accept the funds.

Lending Rules*

Lenders in the state of Arkansas are legally required to comply by the following limitations according to Usury cap in Arkansas Constitution applies. Ark. Const. Amend. 89 § 3.:

Small Loan Rate Cap:
17% per year set by ballot in 2010
*The information displayed may not be current. For the most recent information, please visit http://www.paydayloaninfo.org/state-information/11.

Regulatory Information

If you have a complaint against a Arkansas Cash Advance location you can contact your state regulator below:

Regulator:
Arkansas Attorney General
Address:
323 Center Street, Suite 200Little Rock, Arkansas 72201
Phone:
(501) 682 2007
Website:


Arkansas Check Cashers

Below you can find Arkansas check cashers in the following cities:

Arkansas Statistics**

The following information is key demographic data for the state of Arkansas from the Census bureau.

Total Population:
2,988,248
Median Household Income:
$41,371
Poverty Rate:
19.1%
Median Gross Rent:
$677
High School Graduate or Higher:
84.8%
Bachelor's Degree or Higher:
21.1%
**The information displayed may not be current. For the most recent information, please visit http://www.census.gov/quickfacts.

Borrow Responsibly

The easy application process should not embolden a borrower into thinking such loans are easy solutions to financial difficulties. Short-term loans should never be used for long-term financial planning or anything other than an emergency situation. They should also never be abused. By design, a short-term loan works best to address unexpected financial emergencies, but the borrower needs to remember that the loan will have to be paid back.

Due to the state prohibitions on payday lending, the potential borrower should take advantage of the ability to review and choose a loan that works best for them. This may seem like an unlikely indulgence to someone feeling desperate, but they should remember the full responsibility of the loan terms will be theirs if they agree to accept the loan.

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