What a title loan costs — before Arkansas’s rules
A title loan is usually a single-payment loan due in 15–30 days at around 25% per month — roughly 300% APR — secured by your vehicle. The defining risk is not the rate but the collateral: miss a payment and the lender can repossess the car, and research finds about one in five borrowers eventually loses the vehicle. Where a state caps rates low, single-payment title lending is not offered and a loan above the cap is generally void.
The law in Arkansas
- Rate cap
- 17% per annum hard constitutional usury ceiling on consumer loans (Arkansas Constitution, Amendment 89, § 3).
- Key law
- Arkansas Constitution, Amendment 89, § 3 (effective 2011); prior Art. 19, § 13.
- Enforcement
- The Arkansas Attorney General has repeatedly pursued car-title lenders, reaching a settlement over roughly 300%-interest title loans reported January 2016. The Arkansas Supreme Court (McGhee, 2008) held high-rate short-term lending schemes unconstitutionally usurious.
Arkansas caps interest on consumer loans at 17% per year in its state constitution (Amendment 89, § 3), far below the ~200–300% needed for a viable title loan.
What it means for a Arkansas borrower
You cannot legally get a normal car title loan in Arkansas. The state’s 17% constitutional interest cap is one of the strictest in the country and makes the triple-digit-APR title loan model illegal. Any lender offering a high-rate title loan is operating unlawfully, and the loan can be voided.
If you already have a title loan in Arkansas
A loan that violates Arkansas’s ban may be partly or fully unenforceable — which changes your options with the lender and any collector. This is general information, not legal advice.
- Check whether the lender is licensed in Arkansas — many high-cost online lenders are not.
- Revoke ACH authorization in writing to stop automatic withdrawals from your account.
- File a complaint with the Arkansas attorney general and the CFPB.
- Ask whether the balance is even collectable under Arkansas law before you pay a collector.
Cheaper first — try these before a title loan in Arkansas
Title Loans and tribal lenders in Arkansas
Many online lenders that market title loans to Arkansas residents are tribal lenders arguing their sovereignty places them outside state rate caps — a separate legal question this site tracks in depth. For which tribal brands lend to Arkansas residents and how state law applies to them, see the Arkansas tribal-lending page.
Tribal loans in Arkansas →Frequently asked questions
Are title loans legal in Arkansas?
In Arkansas, a high-cost single-payment title loan is not legally viable. The state’s rate cap or an outright ban makes a ~300% APR title loan void or unavailable, so licensed title lenders do not operate — and a lender that lends anyway is on weak legal footing.
What is the maximum title loan rate in Arkansas?
17% per annum hard constitutional usury ceiling on consumer loans (Arkansas Constitution, Amendment 89, § 3).
What can I do about a title loan I already have in Arkansas?
Because Arkansas effectively bans high-cost title loans, a loan that exceeds the state limit may be partly or fully uncollectible. Check whether the lender is licensed in Arkansas — many high-cost online lenders are not. This is general information, not legal advice.