When in need of cash, people often look to payday loans as their solution. However, it’s essential to realize that payday loans come with a high cost and often lead to more financial difficulties down the road. In Newhope, Arkansas, payday loans are prohibited, which means you won’t find any storefronts offering them.
What are Payday Loans?
A payday loan is a type of loan that is obtained through a short-term loan at a high-interest rate. They’re usually small amounts, ranging from $50 to $1,000, and are typically paid back within two weeks to a month, depending on the borrower’s next payday. Payday loans are an appealing option because they don’t require a credit check and have a quick approval process. However, the interest rates on these loans are incredibly high, averaging around 400% APR. This makes it difficult for borrowers to repay their loans, leading to a cycle of debt that’s hard to escape.
Payday Loans in Newhope, Arkansas
In 2008, the Arkansas state legislature passed a law prohibiting payday lending. The Arkansas Constitution caps interest rates at 17% annually, which makes payday loans illegal in the state. Therefore, payday loans in Newhope, Arkansas are not available.
Why Are Payday Loans Prohibited in Arkansas?
The state of Arkansas banned payday loans to protect consumers from predatory lenders. The high-interest rates on these loans often trap borrowers in a cycle of debt. The average payday loan borrower in Arkansas takes out eight loans per year, with each loan averaging $366. Over time, this can lead to thousands of dollars in fees and interest, making it nearly impossible to emerge from debt.
What Are the Alternatives to Payday Loans in Newhope, Arkansas?
If you’re in need of cash, there are other options available in Newhope, Arkansas. These include:
- Credit Union Loans: Local credit unions often offer low-interest loans for their members. These loans are flexible, and the repayment terms are reasonable.
- Borrow from friends or family: If possible, you can consider relying on close friends or family members for a loan. Be sure to create a repayment plan and stick by it to avoid damaging personal relationships.
- Credit Counseling: Consider seeking credit counseling services to help you create a budget plan and potentially negotiate with your creditors to arrange more affordable payment terms.
- Credit Card Cash Advance: While credit card cash advances come with high interest rates, they are often lower than payday loans. Be sure to do your research and fully understand the repayment terms and fees involved.
Interesting Facts and Statistics About Payday Loans
- In 2020, approximately 12 million Americans used payday loans, resulting in nearly $9 billion in fees.
- The average payday loan borrower takes out eight loans per year.
- The average payday loan is for $375, but borrowers pay $520 in interest and fees, on average.
- In 2019, 13% of Americans surveyed reported taking out a payday loan in the past.
- 72% of payday loan borrowers report using the money for recurring expenses.
Apply Now
Although payday loans are illegal in Newhope, Arkansas, we encourage readers to consider all their options carefully. If you’re looking for a short-term loan and are open to exploring other options, we invite you to fill out an application on our website. At TheGuaranteedLoans, we are a connector service that facilitates connections between borrowers and lenders. Our network of trusted lenders offers various loan options that may fit your needs.