Title loans are illegal in Arkansas1. The Arkansas Short Term Loan Act prohibits lenders from accepting a title as collateral for a short-term loan1. However, there are some companies that offer online title loans in Arkansas, and in some cases, there’s no store visit required2. These secured loans allow you to tap into your car’s collateral and use that cash as security for the desired loan amount2. A title loan allows anyone with a paid off car to borrow a fair amount of money, and you can be approved with no credit history or a poor credit rating2.
To qualify for a car title loan in Arkansas, you’ll need to bring the following documents with you or have them ready to upload if you’re applying entirely online: Proof of Residency – A utility bill or other document with your name and address is typically accepted. Vehicle Title In Your Name – The title to your paid off vehicle must show you as the owner, and there can’t be any liens on the title. You must have a paper copy of the pink slip, as that’s what the lender holds as collateral. Valid Vehicle Registration – Get a certified copy of your registration documentation from any DMV location in AR2.
The difference between a title loan and a payday loan is that a title loan lender uses your car as collateral while a payday loan company underwrites your application based on your credit history. A lender can repossess your vehicle if you ever fall behind on the payments. With a payday loan, the lender can sue you or send your debt to collections, but they cannot take your car away. The interest rates for title loans are sometimes lower than those associated with payday loans. Most local title loan providers will offer larger loan amounts than payday advance companies. The average title loan amount in Arkansas is around $1,500, while the average payday loan comes in at $5002.
It is important to note that while some companies may offer online title loans in Arkansas, it is illegal according to state law. It is always important to research and understand the laws and regulations before applying for any type of loan.
The Arkansas Short Term Loan Act prohibits lenders from accepting a title as collateral for a short-term loan1. The state’s usury law also prohibits short-term loans, payday loans, and cash advances with an APR greater than 17%2. This means that title loans, which are a type of short-term loan where the borrower uses their vehicle title as collateral, are illegal in Arkansas1.
According to my research, the maximum APR for short-term loans in Arkansas is 17%1. However, this law does not apply to most bank loans1. The U.S. Supreme Court decided in 1978 (Marquette National Bank v. First of Omaha Corp.) that national banks may charge the highest rate allowed in their home state, regardless of where the borrower lives1. Additional federal law gave state banks the similar ability to “export” lower rates as well1.