Payday Loans: The Prohibited Practice in Gamaliel, Arkansas
Financial emergencies can happen at any time. When they happen, they can leave you struggling to make ends meet. In an ideal situation, you would have emergency savings or access to a line of credit to help take care of unexpected expenses. Unfortunately, not everyone has access to these options, and that’s where payday loans come in.
A payday loan is a short-term lending option meant to provide quick cash to the borrower. The loans are typically due on the borrower’s next payday and come with high-interest rates. While payday loans can seem like a convenient way to get fast cash, they can lead to a cycle of debt that can be difficult to break.
The Rules Regarding Payday Loans in Gamaliel, Arkansas
In Arkansas, payday loans are prohibited by law. Specifically, Arkansas Code 23-52-101 et seq. states that lenders cannot charge an annual interest rate of more than 17% on loans. Therefore, payday lending is considered illegal in the state of Arkansas.
Gamaliel residents should take caution when considering payday loans or any high-interest rate options. Borrowers who obtain payday loans in the state of Arkansas are subject to severe penalties. Persons practicing Payday Lending in Gamaliel can be legally prosecuted.
The Dangers of Payday Loans
While payday loans may seem like a good way to get quick access to cash, these loans come with many dangerous risks. One primary risk of payday lending is the high-interest rates that come with the loan. Many payday lenders charge interest rates of up to 700%, making it nearly impossible for the borrower to pay back the loan on time.
Another risk is that the cycle of debt that comes with payday lending can be challenging to break. Many borrowers take out a new payday loan to pay off an existing one, leading to a cycle of debt that can last for months or even years.
Payday lending also has a negative impact on credit scores. If a borrower is unable to pay back the loan on time, the lender may send the account to collections, resulting in a negative mark on the borrower’s credit report.
Alternative Lending Options
If you are in need of quick cash, there are alternatives to payday lending. The following are some options you can consider:
- Personal Loans: Personal loans are a better option for those who need quick cash to tide them over in an emergency. Personal loans have lower interest rates than payday loans, and lenders may also be willing to work with borrowers who have less-than-perfect credit.
- Borrow from Friends or Family: Borrowing from friends and family members can be an excellent option when you are in need of money. However, personal relationships can be affected by money issues, so make sure to be honest with your lender regarding your financial situation.
- Credit Cards: If you have access to a credit card, it can be a better option than payday loans. Utilizing a credit card for an emergency expense provides a borrower with more time to pay off the debt and helps build their credit score with every payment made.
Interesting Facts About Payday Loans in Gamaliel, Arkansas
- In Arkansas, payday loans were first prohibited in 2008.
- The average payday loan in the state of Arkansas is $408.
- Payday lending costs Arkansas residents $25 million in fees and interest every year.
Apply Now
Don’t risk getting caught in a cycle of debt by using payday loans in Gamaliel, Arkansas. Instead, consider alternative lending options such as personal loans or credit cards. If you require assistance connecting with potential lenders, TheGuaranteedLoans is here to help. Fill out an online application today, and we will facilitate a connection with the lenders who fit your needs. Remember, TheGuaranteedLoans is not a direct lender- we are a connection service.