Cash Advance and Payday Loans in Arkansas

Below, we look at a few reasons why some types of short-term loans are hard to find in the Land of Opportunity. We also discuss some alternatives to these loans for Arkansas residents who need emergency funds.

Arkansas Cash Advance and Payday Loan Rules and Regulations

Arkansas capitol building

The state of Arkansas prohibits payday loans and certain types of short-term loans. Specifically, the state's usury law prohibits short-term loans, payday loans, and cash advances with an APR greater than 17%. 

As of 2010, Arkansas capped APR at 17% and enacted changes in the law that effectively outlawed payday loans in the state. Since then, Arkansas's legislatures have kept a close eye on lenders across the state to make sure they don't exceed the rate limit. 

Although payday loans are prohibited in Arkansas, consumers still have some options for alternative short-term loans. 

What Are My Options for Basic Expenses and Emergency Funding in Arkansas?

If you find yourself in need of money for any number of reasons, the following options may be available to you in Arkansas:

  • Consumer lenders – Look for lenders who are appropriately licensed to offer long-term loans. Please note that additional fees may also be added to the cost of the loan.

  • strong Credit unions – Members can often receive favorable loan terms. Some banks also offer short-term loans on favorable terms.

  • Credit cards – For financial emergencies, a credit card is useful. There are even credit cards available for people with lower credit scores. However, before requesting a credit card, be sure to read about the interest rates and fees.

  • Government assistance – Eligible residents who are having trouble paying bills may benefit from state-funded welfare programs, such as the Low Income Home Energy Assistance Program.

After you find emergency funding, the next step should be planning for the future. Credit counseling may be a good first step, as it can help consumers learn how to balance their budget and avoid short-term loans altogether.

Installment Loans in Arkansas

Installment loans are not legal in the state of Arkansas. Since 2008, most lending companies have been shut down, although a few are still operating through the internet. Additionally, following the cancellation of the Check Casher Act in 2011, lenders have stopped issuing payday, installment, and car title loans.

Requesting Title Loans in Arkansas

Under the Arkansas Short Term Loan Act, borrowers cannot use their vehicle's pink slip as collateral. As a result, car title loans are not legal in Arkansas. However, other items of value can be used as collateral for a loan, such as jewelry or land. 

Title Loans Alternatives in Arkansas:

  • Pawnshops – pawnshops can be used for small loan amounts. 

  • Boat title loan – boats can be used as collateral in Arkansas.

  • Jewelry title loan – collateral can be gold or any type of expensive jewelry. 

  • Land title loan – you may use land you own as collateral for a loan. 

Final Thoughts

Arkansas' strict payday loan regulations and effective ban on the financial product have undoubtedly made it difficult for individuals to find funding. However, the state has instituted this as a safety measure to protect borrowers. Regardless, Arkansans can still find funding through government assistance programs and credit unions.

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