Arizona Usury Laws

Medieval Latin defined usury as charging excessive interest. Indeed, during much of world history, charging any interest on a loan of money was deemed to be excessive. (Generally speaking, the same principle did not apply in regard to a loan made of plants or animals. Because these were growing things capable of reproduction, they could be lent with “interest” assessed in the way of crops or offspring.)

In any event, the State of Arizona is like most states within the country and does maintain laws on its books governing usurious lending. As a general rule, a personal loan can have a maximum interest rate of ten percent.

In Arizona, as in most states in the U.S.A., not all lending institutions are subject to the usury laws of the state. For example, federally chartered banks and savings and loans operated under an entirely different set of statutes, regulations and rules when it comes to lending practices and loan interest rates. Similarly, loans for the purchase of goods in Arizona (for example, car loans) are subjected to a different set of statutes, regulations and rules.

The applicable statutes governing usurious lending practices and impermissible loans can be found in the Revised Arizona Statutes at Article Six in Chapter Five. This section governs all aspects of consumer lending practices in Arizona at the present time.

Arizona follows the general course that has been long established by courts across the United States. If there is a personal, consumer loan that charges an interest rate in excess of what is permitted by law, the courts of Arizona will consider the loan to be illegal and not subject to enforcement if the consumer has defaulted on the loan. (There have been some limited instances in which the interest rate was only marginally above the legally permitted rate and when other circumstances existed in which courts in Arizona have reformed the loan and the interest rate downward to a legally permissible level and then did enforce the loan as refashioned by the court.)

Nothing contained within this article should be construed as providing to you legal advice. This article has been prepared and presented to you for informational purposes only. If you find that you’ve additional questions pertaining to the applicable usury laws that are in force in the State of Arizona at this time, you should contact a lawyer.

Finally, although we do take all efforts to ensure the accuracy of the information that we are presenting to you, the statutes and regulations regarding usury in the State of Arizona is subject to change.

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