In Bergman, Arkansas, payday loans are prohibited. However, understanding the basics of these types of loans can be helpful in managing one’s finances and avoiding potential pitfalls. Below, we will provide insight into payday loans, how they work, and why they are prohibited in Arkansas.
What are payday loans?
Payday loans are typically short-term loans that are due on the borrower’s next payday. These loans are usually for small amounts, typically no more than a few hundred dollars, and come with high interest rates and fees. They are intended to help borrowers who need cash quickly and cannot access other forms of credit.
The application process for payday loans is typically fast and simple. Lenders may require proof of income, a bank account, and a social security number. Funds are often disbursed quickly and can be available within 24 hours of loan approval. Repayment terms are usually 14-30 days, or until the borrower’s next payday.
Why are payday loans prohibited in Arkansas?
In 2008, Arkansas voters approved a ballot initiative that prohibited payday lending in the state. The Arkansas Constitution was amended to include the following language: “No payday loan may have a maximum term of less than 31 days and shall not exceed $400.” Due to this constitutional amendment, payday loans are not legally available to consumers in Arkansas.
The reasoning behind the ban on payday loans is that they often come with exorbitantly high interest rates and fees, which can trap borrowers in cycles of debt. Many borrowers may not fully comprehend the terms of their loans, and some lenders may engage in predatory practices.
If you are a resident of Bergman, Arkansas, you should not take out a payday loan as they are illegal. Instead, consider exploring other forms of credit such as personal loans or credit cards. If you find yourself in financial hardship, seek the advice of a qualified financial counselor or advisor.
Interesting facts and statistics about payday loans in Arkansas
- Arkansas has the lowest percentage of unbanked households in the United States, with only 7.5% of households lacking access to basic financial services.
- Since the payday lending ban was implemented in Arkansas, many borrowers have turned to online lenders who claim to be based on tribal lands where state laws do not apply.
- In 2019, the Arkansas Attorney General filed a lawsuit against a group of online payday lenders, claiming that they were violating state lending laws.
Apply Now
If you are in need of funds and cannot access traditional forms of credit, TheGuaranteedLoans can help connect you with potential lenders. We are a connector service, not a direct lender, and work with various reputable lenders to provide you with options that meet your needs.
We strive to provide our customers with fast and secure loan processing, with funds available in as little as 24 hours. Simply fill out our online application, and we will facilitate the connection between you and our network of potential lenders.
Remember to consider all lending options available to you, including personal loans, credit cards, and options for financial counseling. Borrowing money is a serious financial decision, and understanding the terms and conditions of any loan is important in making a sound choice.