Generally
Nevada has no limit on the rate of interest to which parties may agree so long as the agreement reflects an arms-length transaction.[1] Further, Nevada allows compound interest on loans.[2]
Pawnbrokers and Short Term Loans
Although Nevada does not have a general limitation on interest rates, certain transactions and business are subject to interest rate and other restrictions. Pawnbrokers are prohibited from charging more than 13% interest per month on any loan of money secured by personal property pledged to, or held by, a pawnbroker.[3] Further, Nevada Revised Statutes, Chapter 604A recognizes three forms of short term lending, which are all subject to certain restrictions: deferred deposit loans, high-interest loans, and title loans. Lenders may not pursue arbitration or civil suit on any Chapter 604A “defaulted loan or any extension or repayment plan thereof.”[4]
Deferred Deposit Loans, AKA Payday Loans
A deferred deposit loan is a transaction where a debtor provides a lender with a check or authorization for electronic transfer of a set amount of money on a future date certain in exchange for immediate receipt of a lesser sum of money than that authorized by the check or transfer.[5] A payday loan may not exceed 25% of the debtor’s gross monthly income, including both principal and interest.[6] An original term of the loan may not exceed 35 days,[7] and may not be extended for a period longer than 90 days.[8]
High-Interest Loans
A high-interest loan is one where the debtor pays a single or multiple installments against the loan amount and is charged in excess of 40% interest per year.[9] Such a loan may be made for as long as 90 days if it requires fully amortized installments, is not subject to extension, and does not contain a balloon payment.[10]
Title Loans
Nevada allows loans against the title of a vehicle or against a perfected security interest in a vehicle.[11] Car title lenders are not allowed to require or accept any other collateral besides the title of a vehicle, or to provide a loan for the purchase or refinancing of a vehicle.[12] Title lenders may charge in excess of 35% interest per year.[13]
[1] NRS 99.050; see also Consumers Distrib. Co. v. Hermann, 107 Nev. 387, 393, 812 P.2d 1274, 1278 (Nev. 1991).
[2] NRS 99.050, 99.065.
[3] NRS 646.050(1).
[4] NRS 604A.480(2)(f); see also Attorney General Opinion No. 2012-06.
[5] NRS 604A.050.
[6] NRS 604A.425(1); see also State, Dept. of Bus. and Industry v. Check City P’ship, LLC, 130 Nev. Adv. Op. 90, 337 P.3d 755 (2014).
[7] NRS 604A.480(1).
[8] NRS 604A.480(1).
[9] NRS 604A.0703.
[10] NRS 604A.480(2).
[11] NRS 604A.105(1)(b).
[12] NRS 604A.105(2).
[13] NRS 604A.105(1)(a).
