Beneath Arizona’s specific lending statutes sits a general rule that applies whenever nothing more specific governs a debt. Understanding Arizona’s usury law helps Mesa borrowers see the baseline every other rate cap is built on top of.
Quick answer: Arizona law sets a default interest rate of 10% per year on any loan, debt, or obligation that isn't governed by a written agreement specifying a different rate. Once a rate is contracted for in writing, the parties may agree to any rate, unless a specific statutory cap, like the consumer lender or title loan rules, applies instead.
The default rate
Arizona Revised Statutes § 44-1201 sets a default interest rate of 10% per year on any loan, indebtedness, or obligation, unless a different rate is contracted for in writing. This default applies to informal debts, verbal agreements, and any lending arrangement that isn’t otherwise documented with an agreed rate.
Why a written contract changes everything
Once a rate is agreed to in writing, Arizona’s general usury law allows the parties to set virtually any rate they choose, with no statutory ceiling under this particular section. This is exactly why more specific statutes exist: consumer lenders are bound by the 36%/24% cap under § 6-632, and title lenders by the tiered monthly rates under § 44-291, precisely because the general usury law alone wouldn’t limit a written agreement.
A newer exception: medical debt
Arizona voters carved out a specific exception in 2022. Medical debt now carries its own, much lower interest ceiling under the same statute, tied to a formula based on Treasury yields and commonly described as capping around 3% a year. This exception applies regardless of what’s written in a medical billing agreement, and is covered in detail elsewhere in this guide.
The forfeiture penalty
Arizona Revised Statutes § 44-1202 imposes a strict penalty on a lender who charges interest above whatever cap actually applies: the lender forfeits its entire right to collect interest on the debt, not merely the excess over the legal rate. This is a meaningful consumer protection, since it removes any financial incentive to quietly overcharge and hope a borrower doesn’t notice.
How the layers fit together
Think of Arizona’s interest rate rules as layers: the 10% default applies absent any written agreement; a written agreement can set any rate unless a specific statute caps a particular lender type; consumer lenders, title lenders, and now medical creditors each have their own tighter statutory ceiling on top of the general rule.
What this means for a Mesa borrower
If you’re ever unsure which rate applies to a debt, start by asking whether there’s a signed written agreement specifying a rate, and if so, whether the lender falls into a category with its own statutory cap. A licensed consumer lender, title lender, or medical provider should be able to tell you exactly which rule governs your specific debt.
A quick self-check before signing anything
Before signing any Arizona loan agreement, ask yourself three questions: is there a written rate specified, does a specific statute like the consumer lender or title loan caps apply to this type of loan, and if so, does the disclosed rate fall within that cap? Running through this short mental checklist takes a minute and can catch a problem before you’re bound by the agreement.
Why lawmakers layered the rules this way
Rather than one blanket rule for every loan, Arizona’s layered approach lets the legislature and voters target specific problem areas, like medical debt in 2022, without rewriting the entire usury framework. This is why new protections can appear over time, as with Prop 209, layered on top of the general 10% default rather than replacing it.
FAQ
What’s Arizona’s default interest rate?
10% per year on any loan or debt without a written agreement specifying a different rate.
Can a written contract set a higher rate than 10%?
Yes, generally any rate can be agreed to in writing, unless a more specific statute, like the consumer lender or title loan caps, applies instead.
What happens if a lender overcharges interest?
The lender forfeits its right to collect any interest on the debt, not just the amount above the legal rate.
Does this general law apply to medical debt?
Medical debt now has its own, much lower rate ceiling under a 2022 voter-approved law, separate from the general 10% default.
This article is for educational purposes only and is not financial advice. Loan amounts, fees, and laws can change, so verify current rules with the Arizona Department of Insurance and Financial Institutions (DIFI) at difi.az.gov/complaints and confirm any lender is licensed before you borrow.