Genoa, Arkansas residents looking for a payday loan may be disappointed to know that payday lending is illegal in Arkansas. This means payday loan stores that offer short-term, high-interest loans cannot operate in the state.
What Are Payday Loans?
Payday loans are short-term loans with high-interest rates that are meant to be paid back by the borrower’s next paycheck. These loans are usually for small amounts of money, up to $500 or so, and are often marketed as a way to tide consumers over until their next payday.
Some payday lenders require a postdated check as collateral, while others ask for access to the borrower’s bank account. Payday lenders typically charge fees and annual interest rates that can be as high as 400 percent or more.
Why Are Payday Loans Prohibited in Arkansas?
In 2008, the Arkansas attorney general’s office and the state’s banking regulators launched a crackdown on payday lending in the state. They found that payday lenders were charging high fees and interest rates that were not in line with the state’s usury laws, which set a cap on the amount of interest that can be charged on loans.
As a result of the crackdown, payday lending is now illegal in Arkansas. The state’s usury laws set a cap of 17 percent on interest rates for consumer loans. This means payday lenders cannot offer loans with annual interest rates above 17 percent.
What Are the Alternatives to Payday Loans in Genoa, Arkansas?
While payday lending is illegal in Arkansas, there are other options for consumers who need access to quick cash.
- Installment Loans: Installment loans are loans that are repaid over time in equal payments. These loans often have more reasonable interest rates than payday loans and can be a good option for borrowers who need to borrow more than a few hundred dollars.
- Credit Cards: Credit cards can be a good option for consumers who need to borrow money in the short term. While credit card interest rates can be high, they are often lower than payday loan rates.
- Friends and Family: Borrowing money from friends and family can be a good option for consumers who need money in a hurry. While borrowing from friends and family can be fraught with emotional and financial risks, it can also be a good way to access cash without paying high interest rates.
- Personal Loans: Personal loans are another option for consumers who need to borrow money. These loans are often available through banks and credit unions and can have more reasonable interest rates than payday loans.
Genoa residents should always read the terms and conditions of any loan carefully before borrowing money. They should also shop around and compare rates from multiple lenders to make sure they are getting the best deal.
Interesting Statistics on Payday Loans
- 12 million: The approximate number of Americans who use payday loans each year.
- $9 billion: The amount of money that payday lenders collect in fees each year.
- 80 percent: The percentage of payday loans that are rolled over or renewed rather than paid off.
- 69 percent: The percentage of payday loan borrowers who use the loans to cover recurring expenses.
- 16 percent: The percentage of payday loan borrowers who use the loans for emergencies.
Apply Now with TheGuaranteedLoans
If you are a Genoa resident in need of a loan, TheGuaranteedLoans can help you connect with potential lenders. Simply fill out our online application to get started.
Remember, TheGuaranteedLoans is a connector service and not a direct lender. We do not make credit decisions or determine loan terms. Instead, we facilitate your connection with lenders who may be able to meet your needs.
Fill out our application today to see if you qualify for a loan through one of our lenders.