Special situations

Why does Arkansas cap personal loan rates at 17%?

Short answer

Arkansas has a constitutional usury cap of 17% APR set by Amendment 89 to the state constitution. The cap applies to most consumer loans, making Arkansas one of the most restrictive states for unsecured lending. Many national online lenders don't operate in Arkansas because of the cap.

Context

Arkansas Amendment 89 (1982) sets the maximum consumer-loan interest rate at the higher of 17% or the federal discount rate plus 5%. In practice, with the federal discount rate well below 12%, the 17% APR cap controls.

For Arkansas residents seeking a personal loan, the limited lender pool means fewer competing offers and stricter underwriting. Federal credit-union PALs (capped at 28% APR under federal law, which preempts state caps for federal credit unions) and CDFIs are common alternatives.

Editorial

Reviewed by: Compliance Review
Last reviewed: May 22, 2026

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