Payday Loans and Cash Advance in Arizona

Prohibited since 2010; 36% consumer loan cap. Below: the law, the limits, what $300 costs here, who regulates it, and how to request a cash advance online in Arizona.

Payday loans are not legal in Arizona. Max amount: No payday product; consumer lender rates are set by balance tier rather than a loan cap (A.R.S. 6-632). Max fee: No payday fee; consumer lenders are capped at 36% a year on the first $3,000 and 24% above that (A.R.S. 6-632), plus an origination fee of up to 5% but not more than $150 (A.R.S. 6-635). A $300 loan for 14 days costs about $4.14 (36% APR). Regulator: Arizona Department of Insurance and Financial Institutions, 602-364-3100.

Is a Cash Advance Legal in Arizona?

Payday loans are not legal in Arizona. The state licensed deferred presentment companies, the legal name for payday lenders, under a 2000 law that carried its own sunset: Laws 2000, Chapter 141 repealed the program as of July 1, 2010. In 2008 the industry put Proposition 200 on the ballot to remove that expiration date; voters rejected it, and the law expired on schedule. The Department of Insurance and Financial Institutions states plainly that the law allowing payday loans expired on June 30, 2010, that it no longer licenses payday lenders, and that consumer loans with annual interest rates over 36 percent plus authorized fees became illegal on July 1, 2010. Small-dollar lending now runs through the consumer lender statutes in Title 6, Chapter 5 of the Arizona Revised Statutes: licensed consumer lenders may charge 36 percent a year on loans of $3,000 or less, 24 percent on the portion above $3,000, plus a limited origination fee. For a borrower this means any storefront or website offering a two-week payday loan in Arizona is either unlicensed or is not what it claims to be. The high-cost product that survived is the vehicle title loan, which runs under a separate statute with much higher rates.

The governing law is Arizona Revised Statutes, Title 6, Chapter 5 (Consumer Lenders); former deferred presentment law expired July 1, 2010 (A.R.S. 6-632 and 6-635; Laws 2000, Chapter 141 (sunset of deferred presentment); A.R.S. 44-291 (title loans)).

Loan Limits and Terms in Arizona

Arizona small-dollar loan rules at a glance
Rule	AZ
Maximum amount	No payday product; consumer lender rates are set by balance tier rather than a loan cap (A.R.S. 6-632)
Maximum term	Not applicable; consumer lender loans are installment loans with no payday-style term limit
Minimum term	Not applicable
Maximum fee per $100	No payday fee; consumer lenders are capped at 36% a year on the first $3,000 and 24% above that (A.R.S. 6-632), plus an origination fee of up to 5% but not more than $150 (A.R.S. 6-635)
APR on a $300, 14-day loan	36% at the consumer lender cap, about $4.14 in interest on $300 for 14 days before any origination fee
Rollovers	Not applicable; the deferred presentment statute expired July 1, 2010
Cooling-off period	Not applicable
Statewide database	None

Arizona replaced payday lending with a rate cap rather than a product. A licensed consumer lender can charge a consumer loan rate of 36 percent on the first $3,000 and 24 percent on anything above, or a blended rate that works out the same. On top of the rate, A.R.S. 6-635 allows an origination fee of up to 5 percent of the loan, capped at $150, and a delinquency charge of 5 percent of any installment more than seven days late. Those fees matter on small loans: a $15 origination fee on a $300 loan is more than three times the two-week interest at 36 percent. The gap in the system is the title loan. Secondary motor vehicle finance transactions under A.R.S. 44-291 may charge a monthly rate of 17 percent on $500 or less, which is 204 percent a year, and they are legal.

What a $300 Loan Costs in Arizona

Worked example: $300 for 14 days
Amount	Term	Fee	You repay	APR
$300	14 days	$4.14	$304.14	36%

Arizona has no payday product, so this shows the cheapest legal small-dollar loan: a consumer lender loan at the A.R.S. 6-632 cap of 36 percent a year on balances of $3,000 or less. Interest on $300 for 14 days is $300 x 0.36 x 14 / 365 = $4.14, repaid as $304.14. APR from the fee: $4.14 / $300 = 0.0138; 0.0138 x 365 / 14 = 0.36, or 36 percent. A.R.S. 6-635 also permits an origination fee of up to 5 percent ($15 here), which would lift the all-in cost to $19.14 and the effective rate to about 166 percent for a two-week loan; consumer loans are normally repaid over months, which spreads that fee.

Run your own numbers with the cash advance calculator.

Consumer Protections and Who to Call in Arizona

Consumer loans with an annual rate above 36 percent plus authorized fees have been illegal in Arizona since July 1, 2010, and the Department of Insurance and Financial Institutions no longer licenses payday lenders.
Anyone making consumer lender loans to Arizona residents must be licensed as a consumer lender under A.R.S. Title 6, Chapter 5, and DIFI examines licensees and takes complaints about financial entities through its online complaint form.
A licensed consumer lender's finance charge is capped at 36 percent a year on the first $3,000 of principal and 24 percent on the portion above that (A.R.S. 6-632).
Fees are limited to an origination fee of no more than 5 percent of the loan and never more than $150, a delinquency charge of 5 percent of an installment more than seven days late, and a returned-item fee (A.R.S. 6-635).
DIFI directs anyone who sees a sign or website advertising payday loans in Arizona to report it to the Arizona Attorney General's Office at 866-879-5219.
A title loan under A.R.S. 44-291 must disclose its annual rate in the contract, calculated as the monthly rate times twelve, so the 17 percent monthly rate on small loans has to appear as 204 percent a year.

Complaints and licence checks go to the Arizona Department of Insurance and Financial Institutions: 602-364-3100, difi.az.gov, or file a complaint at the regulator's complaint page. The federal CFPB also takes complaints about any lender.

Online vs Storefront Lenders in Arizona

No online lender can lawfully offer a payday loan to an Arizona resident, because the product itself no longer exists in state law. A website that advertises payday loans in Arizona is either a licensed consumer lender describing an installment loan capped at 36 percent, or an unlicensed lender, often based out of state or affiliated with a tribal government, that Arizona's rate cap was designed to exclude. DIFI's guidance is direct: if you see payday loans advertised, contact the Arizona Attorney General's Office at 866-879-5219. Before borrowing from any online lender, search DIFI's licensee records or NMLS Consumer Access for a consumer lender license, and check that the disclosed APR is 36 percent or less on a loan of $3,000 or under. A loan from an unlicensed lender at 300 or 400 percent APR is not a payday loan under Arizona law; it is an illegal consumer loan, and the Attorney General's consumer protection office and the Consumer Financial Protection Bureau are the places to report it.

Alternatives If a Payday Loan Is Not the Right Fit

The legal small-dollar options in Arizona are cheaper than a payday loan by design. A licensed consumer lender can lend at no more than 36 percent a year on the first $3,000, repaid in installments, with an origination fee of up to 5 percent capped at $150. Federal credit unions may offer payday alternative loans under NCUA rules: $200 to $1,000 over one to six months, or up to $2,000 over up to twelve months, at no more than 28 percent APR with an application fee of at most $20 and no rollovers. The product to be careful with is the title loan. Under A.R.S. 44-291 a secondary motor vehicle finance transaction may charge 17 percent a month on $500 or less, 15 percent from $500 to $2,500, 13 percent from $2,500 to $5,000 and 10 percent above that, and your vehicle is the collateral. Ask your employer about an advance on earned wages, ask creditors for a payment plan, and call 2-1-1 Arizona for local assistance before pledging a car.

Compare the installment loan and payday alternative loan options before you decide.

Cities We Cover in Arizona

Frequently Asked Questions

Are payday loans legal in Arizona?

No. Arizona's deferred presentment law expired on June 30, 2010 after voters rejected Proposition 200, which would have removed the sunset date. Since July 1, 2010, consumer loans with annual rates above 36 percent plus authorized fees have been illegal, and the Department of Insurance and Financial Institutions no longer licenses payday lenders. Licensed consumer lenders may make installment loans at up to 36 percent.

What is the maximum interest rate on a small loan in Arizona?

For a licensed consumer lender, 36 percent a year on the first $3,000 of principal and 24 percent on the portion above that, under A.R.S. 6-632. A.R.S. 6-635 allows an origination fee of up to 5 percent of the loan, never more than $150, and a 5 percent late charge on installments more than seven days overdue. Title loans under A.R.S. 44-291 are the exception, at up to 17 percent a month.

Why did payday loans end in Arizona?

The 2000 law that authorized deferred presentment companies contained a repeal date of July 1, 2010. In 2008 the industry sponsored Proposition 200 to delete that date and keep payday lending with a 15 percent fee; the fiscal analysis noted 757 licensed locations at the time. Voters rejected the measure, the statute expired as scheduled, and the 36 percent consumer lender cap became the ceiling for small loans.

Can I get an online payday loan in Arizona?

Not legally. No Arizona license exists for payday lending, so an online lender charging payday-style fees to an Arizona resident is making an illegal consumer loan above the 36 percent cap. DIFI asks residents who see payday loans advertised to contact the Arizona Attorney General's Office at 866-879-5219. Check DIFI's records for a consumer lender license before borrowing from any website.

Are title loans legal in Arizona?

Yes, and they are the high-cost product that survived. A.R.S. 44-291 lets a secondary motor vehicle finance company charge a monthly rate of 17 percent on $500 or less, 15 percent on $500 to $2,500, 13 percent on $2,500 to $5,000 and 10 percent above that, with the annual rate disclosed as the monthly rate times twelve. The loan is secured by your vehicle, so a default puts the car at risk.

Nearby States

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