PHOENIX (3TV/CBS 5) — Arizona got rid of payday loans a decade ago because of exorbitant interest rates that preyed on low-income families.
Now, some Arizona advocacy groups are pushing to crack down on car title loans.
A few years ago, Phoenix grandmother Knoye Jackson had trouble paying her bills, so she took out a $700 car title loan to make ends meet.
“I just needed the money,” Jackson said. “I needed to pay what I needed to pay so we’re not in the dark. I didn’t have a lot of options, so they were the only option when you’re desperate and you’re going to have stuff turned off.”
Jackson now regrets taking out a title loan on her car.
She said the sky-high interest rate attached to the loan resulted in her paying back $1,500 over two years just to keep her car.
Car title loans in Arizona can carry an annual percentage rate up to 204%.
It’s those high interest rates that have prompted a new push to change how car title loan companies do business.