The rate of interest in Arkansas is governed by Article 19, Section 13 of Arkansas Constitution. The maximum lawful rate of interest on any contract cannot be more than five percent (5%) per annum above the Federal Reserve Discount Rate at the time of the contract. Any contract with a rate of interest more than the lawful rate will be void as to the unpaid interest. Persons who have paid usurious interest may recover twice the amount of the interest paid. Knowingly charging a rate of interest exceeding the maximum rate fixed by law is unlawful and any person committing such an act is punishable by law. The rate of interest for all consumer loans and credit sales is capped at 17 percent per annum. Any rates of interest greater than 17 percent will be void as to the principal and interest.
Rate of interest shall be six percent (6%) per annum if a particular contract has not agreed upon a rate of interest.
Ark. Const. Art. 19, § 13
Maximum lawful rates of interest.
(a) General Loans:
(i) The maximum lawful rate of interest on any contract entered into after the effective date hereof shall not exceed five percent (5%) per annum above the Federal Reserve Discount Rate at the time of the contract.
(ii) All such contracts having a rate of interest in excess of the maximum lawful rate shall be void as to the unpaid interest. A person who has paid interest in excess of the maximum lawful rate may recover, within the time provided by law, twice the amount of interest paid. It is unlawful for any person to knowingly charge a rate of interest in excess of the maximum lawful rate in effect at the time of the contract, and any person who does so shall be subject to such punishment as may be provided by law.
(b) Consumer Loans and Credit Sales: All contracts for consumer loans and credit sales having a greater rate of interest than seventeen percent (17%) per annum shall be void as to principal and interest and the General Assembly shall prohibit the same by law.
(c) Definitions: As used herein, the term:
(i) “consumer loans and credit sales” means credit extended to a natural person in which the money, property, or service which is the subject of the transaction is primarily for personal, family or household purposes.
(ii) “Federal Reserve Discount Rate” means the Federal Reserve discount Rate on ninety-day commercial paper in effect in the Federal Reserve Bank in the Federal Reserve District in which Arkansas is located.
(i) The rate of interest for contracts in which no rate of interest is agreed upon shall be six percent (6%) per annum.
(ii) The provisions hereof are not intended and shall not be deemed to supersede or otherwise invalidate any provisions of federal law applicable to loans or interest rates including loans secured by residential real property.
(iii) The provisions hereof revoke all provisions of State law which establish the maximum rate of interest chargeable in the State or which are otherwise inconsistent herewith. [As amended by Const. Amend. 60.]