Arkansas Payday Loan Laws

The Arkansas Constitution in Article 19, section 13 Amendment 60 states that interest rates on loans in the state can only be five percent of the current federal rats. This Amendment helps to solidify the banning of payday lending companies within the state.

• Maximum Payday Loan – Prohibited
• Maximum Payday Loan Terms – Not Applicable
• Maximum Annual Percentage Rates (APR) – Not Applicable

Arkansas is one of a handful of states in the United States that have made the practice of lenders making high interest payday loans illegal. There were activist groups fighting for the lawmakers to put an end to these loans after many witnessed their family, friends, and neighbors get in to serious financial trouble after taking out one or more payday loans. The opposition to the ban fought vigorously to continue their high interest lending, but fortunately for Arkansans, they lost.

Consequently, due to this loss the payday loan service companies have used loopholes to make their way back in to target Arkansas’s most needy and financially desperate residents. The lenders that were more numerous than some famous fast food chains, now employ sneaky tactics like offshore businesses. They then open online payday loan websites that offer no faxing payday loans, instant cash, guaranteed approval, and no credit or previous payday loan checks.

Once they have the consumer in the line, they reel them in by offering them higher loan amounts than they could ever qualify for are a legitimate banking establishment. For many borrowers dealing with financial hardships, the prospect of getting $1,500 to $5,000 deposited into his or her bank accounts is too much to resist. However, many never take the time to even consider the outlandish interest rate that is attached to the payday loan.

The payday lenders will even bury the triple digit APR in the confusing wordage of the loan agreement. The deceitful lenders are able to get away with these practices by having their businesses oversea, as mentioned above. This way they can charge any high processing, handling, and/or broker fees they choose. In some instances, their customers will borrow $500 dollars, but after fees and interest, that amount is closer to $250 dollars or less.

Residents in Arkansas should beware of any online payday leaning company offering services. They are not an Arkansas business, therefore, not subject to the states lending laws and regulations. These lenders have found a way to bypass current laws in order to take advantage of those most in need.

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