Payday Loans Arizona

Learn about payday loan regulations in Arizona with zaving.

Last updated by Zaving Editorial Team, on April 22nd, 2024

Do you need financial assistance in Arizona? Whether it's unexpected bills or emergencies, finding the right solution is essential. You can explore payday lending laws in Arizona and discover the alternative options available right here with zaving to help you navigate your financial needs.

What is a payday loan and can I get one in Arizona?

A payday loan is a short-term, high-interest loan typically due on the borrower's next payday. These loans are designed to provide quick access to funds for individuals who are facing unexpected expenses or financial emergencies. Payday loans are typically small-dollar amounts, ranging from $100 to $1,000, although the specific loan amount may vary depending on the lender and state regulations.

In Arizona, payday loans have been prohibited since 2010, when the law permitting payday lending in the state expired. Under the Consumer Lenders Act, as outlined in Ariz. Rev. Stat. Ann. §§ 6-601 et seq., lenders cannot offer consumer loans with annual interest rates exceeding 36%, in addition to authorized fees. This means that payday lenders in Arizona are restricted from charging more than 36% APR for small loans under $3,000. As a result, payday loans are not available as a financial option for individuals residing in Arizona.

What are the alternatives to payday loans in Arizona?

There are several alternatives to payday loans in Arizona that individuals can explore when in need of short-term financial assistance.

Here are some options:

  • Personal installment loans: Consider applying for a personal installment loan from a bank, credit union, or online lender. These loans typically have lower interest rates and longer repayment terms compared to payday loans.
  • Credit union loans: Credit unions often offer small-dollar loans with more affordable interest rates and flexible repayment terms for their members. Consider joining a credit union and inquire about their loan options.
  • Emergency assistance programs: Explore local community resources and government programs that provide emergency financial assistance to individuals in need. These programs may offer grants, vouchers, or low-interest loans to help cover unexpected expenses.
  • Financial counseling services: Seek assistance from nonprofit credit counseling agencies or financial counseling services. These organizations can provide guidance on budgeting, debt management, and finding alternative solutions to financial challenges.
  • Negotiate payment plans: Contact your creditors or service providers to negotiate payment plans or request extensions on existing bills. Many creditors are willing to work with borrowers to find manageable repayment solutions.
  • Local charities and nonprofit organizations: Reach out to local charities, churches, or nonprofit organizations that provide assistance with essential needs such as food, housing, and utilities. These organizations may also offer financial assistance programs or referrals to other resources.
  • Friends and family: Reach out to friends or family members who may be willing to provide a loan or assistance during difficult times. Be sure to discuss repayment terms and expectations upfront to avoid straining relationships.

Can I take out a payday loan in another state?

To take out a payday loan, you need to be a resident of the state where you wish to obtain the loan. Lenders verify the borrower's residency as part of the application process to ensure compliance with state laws and regulations. Borrowers who attempt to secure a loan from an out-of-state lender may face denial of the loan or potential penalties for attempting to obtain a loan under false pretenses. Ultimately, your residency status is a crucial factor in determining your eligibility for borrowing.

Furthermore, payday lenders are typically licensed to provide loans only within the state or states where they are registered. This regulation ensures that payday lending practices are governed by the laws of the state where the lending institution is established.
State laws regulate various aspects of payday lending, including interest rates, fees, maximum loan amounts, repayment terms, rollovers, and the number of loans a borrower can have simultaneously. Each state has its own specific rules governing these aspects, so it's essential to understand the regulations in the state where you reside.

As of February 2024, payday loans are legal in 29 U.S. states. These are: Alabama, Alaska, California, Delaware, Florida, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Missouri, Nevada, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming.

Payday loans are prohibited or severely restricted in the District of Columbia and the following states:

  • Arizona          
  • Arkansas
  • Colorado
  • Connecticut
  • Georgia
  • Hawaii
  • Illinois
  • Maryland
  • Massachusetts
  • Minnesota
  • Montana
  • Nebraska
  • New Hampshire
  • New Jersey
  • New Mexico
  • New York
  • North Carolina
  • Pennsylvania
  • South Dakota
  • Vermont
  • West Virginia