The Laws Regarding Title Loans
Car title loans can be an excellent source of emergency funds, and they can be obtained by people with any credit score. It does not matter whether you have good credit, bad credit, or no credit at all. Car title loans use your car’s title to secure the loan. Before you get a car title loan though, it is important that you research and understand all of the regulations involving car title loans.
Each state has their own specific laws and regulations regarding car title loans. They can vary pretty drastically from one state to another. Florida, for example, sets the maximum interest rates based on the amount borrowed. Companies are only allowed to charge up to 30% for loans up to $2,000, up to 24% for loans from $2,000 to $3,000, and up to 18% on loans over $3,000. These laws and regulations can change from year to year, so it is always wise to check them before applying for any loan.
Agreements
Another thing to understand is that Florida law requires that the lender and borrower sign an agreement. This agreement must clearly list the terms of the loan including the amount borrowed, interest owed on the loan, and the amount of money that the borrower is obligated to pay back in order to meet the terms of the agreement. Always read the agreement fully before you sign and never take a loan based off of a verbal agreement.
Assets
Finally, in the event that something catastrophic happens and you are unable to pay back the loan, the lender has the right to repossess your car. They must, however, provide you a notice at least 10 days in advance of any sale of the car. During this time, you have the right to get your car back by making a full payment to satisfy the terms of the original agreement.
These are the basics regarding most car title loans. Most auto title loan companies are honest and upfront. Disagreements are most often because the consumer didn’t take the time to understand the requirements of the loan they signed up for, or their rights. If you take the time to understand the laws and regulations within your state beforehand, then you will find a car title loan is one of the best loans out there for emergency funds. For more information, call Embassy Loans and ask any of the team about a car title loan.
