All loans can be classified as secured or unsecured. Secured loans require collateral and usually have reasonable rates of interest. Unsecured loans do not require any collateral and usually have considerably higher rates of interest. Title loans are secured and hence are a better proposition than unsecured financing such as payday loans. The latter have exorbitant interest rates. Those who do not have any asset that can be used as collateral will find unsecured loans as the only option. Those who own a car can consider title loans near me or online.
What is a Title Loan?
Title loans are secured loans that require the title of your vehicle as security or collateral. As a borrower, you would capitalize on the financial value of your vehicle and borrow a sum of money for a short term. Usually, title loans are capped at a few hundred to a few thousand dollars, depending on the value of your car. You get anywhere from four weeks to a few months to repay the loan amount with the accrued interest. If you fail to repay the loan, the lender can seize your automobile and sell it off to recoup the money it had lent along with the accrued interest.
Title loans are helpful in times of financial distress. These loans should not be opted for discretionary expenses. Paying for a holiday, buying nonessential items or borrowing some money for a purpose that is not an absolute necessity would be financially unwise. Title loans are one of the best options when you really need some money and know for certain that you can repay the loan amount with the interest, so you get to keep your car. You don’t have to give up the possession of your car at the time of loan disbursal or during the repayment term. You can continue to use your car while you keep repaying the installments. Your car would be seized and possessed by the lender only if you fail to repay the loan at the end of the term.
Local Lenders vs. Online Lenders
As is the case with most loans these days, you could apply for a title loan online or you could visit local title loan places near me. Here is a brief assessment of the pros and cons of local lenders and online lenders.
- The most notable shortcoming or limitation of local lenders is that you would only get to explore those that have a physical presence in your city, town or suburb. The most convenient reality about online lenders is that you are not confined to your area or region. However, since title loans involve an actual tangible asset, some local associates or partners of the online lender will be involved at some stage, whether to vet the vehicle you are using as collateral or to seize and possess the vehicle after you fail to repay.
- Dealing with local lenders allows you to have lucid conversations right from the start. You can be at the offices of the local lenders, discuss your needs, show them the vehicle, share a copy of the registration of vehicle and prove your ownership, negotiate directly to get a greater loan amount than what they would offer you initially and you may also negotiate the rate of interest. Online lenders do have multiple mediums of communication but speaking via chat, email or over the phone is not the same as consulting across the table.
- There are many websites that operate as title loan providers but they are not exactly the lenders. They are simply facilitators or brokers. Such websites or agencies will help you to find many title loan lenders, based in the city, county or state and perhaps from around the country. As long as you are not paying fees, such services are helpful. Local lenders are rarely facilitators. They would be the actual lenders so you get to talk directly with the people who would be approving your loan and disbursing the amount. A direct correspondence is desirable. You could use an aggregator website, of brokers or facilitators, to get an idea about title loans. You can get multiple quotes and that would provide you with facts to make an informed decision when you are dealing with local lenders.
Top 5 Local Lenders
Fortunately, you do not need to choose between local lenders and online lenders. Many title loan providers have a formidable online presence and an expansive offline presence. Here are some of the top local title loan companies in the country right now.
TitleMax is a private lender with corporate offices at Savannah in Georgia and Dallas in Texas. It has more than a thousand offices across sixteen states. The lender is known for its quick application and processing. There are instances when the lender approves title loans in less than twenty four hours. You can apply online or you can visit one of their offices near you. The lender not only accepts cars or vehicles as collateral. It also accepts motorcycles. The company has simplified the whole process, right from applying for a title loan to getting your title back after you have repaid the loan with interest.
Check Into Cash
Check Into Cash specializes in title loans and has a presence in thirty states. There are over eleven hundred offices in the United States. The company also operates in the United Kingdom. The lender can conduct an appraisal of your vehicle. The valuation will give you an idea of how much money you can borrow using the title as collateral. All you need is the title, photo identification and the vehicle to prove that you are in possession of the car you own to apply for a loan from Check Into Cash. The lender also deals in cash advances, payday loans and line of credit among other financial services.
Ace Cash Express
Ace Cash Express specializes in many types of short term loans. The company is headquartered at Irving in Texas. It has a certain degree of omnipresence online. It has stores in two dozen states and in the District of Columbia. The lender is one of the members of FiSCA or Financial Service Centers of America. It is a nationwide trade association representing providers of financial services. ACE is also a member of various state level industry associations, wherever it has a brick and mortar presence.
Speedy Cash has been around for longer than two decades now. It offers title loans only at its stores in the state of Oregon. It offers only online loans in Idaho, Wyoming, Utah, North Dakota, Wisconsin, Oklahoma, New Mexico, Ohio, South Carolina, Virginia, Delaware, Rhode Island, Hawaii and Alaska. The lender offers loans online and offline or at its stores across Washington, California, Nevada, Arizona, Colorado, Kansas, Texas, Missouri, Illinois, Louisiana, Tennessee, Mississippi and Alabama. Speedy Cash has a simple straightforward system. You bring your car at one of their stores, file an application, the vehicle is inspected the documents are vetted, their lending decision is conveyed to you and subsequently you can choose to accept the proposition or turn it down. Everything happens systematically and you are always in the loop.
Loan Mart offers title loans regardless of credit score. Some title loan lenders will conduct a credit check. Loan Mart is a tad lenient in this regard. Presently, Loan Mart operates in California, Arizona, Alabama, Georgia, Missouri, New Mexico, Utah, South Carolina and Illinois. The lender usually offers a minimum of a thousand dollars but the specifics of a loan will always depend on the particulars of an application. Secured title loans are usually processed in twenty four hours. You need to have a verifiable income to qualify. You should not have a car loan that you are still repaying and if there is one, then it should be nearing the end of its term for you to qualify for a title loan from Loan Mart.
Title Loan Laws by State
Alabama has capped the rate of interest of title loans at 25% and the loan term at one month.
Arizona has capped the rate of interest of title loans at 17% for $500 or less, 15% for $500 up to $2,500, 13% for $2,500 up to $5,000 and 10% for loans worth more than $5,000.
California has capped the rate of interest for $2,500 worth title loan at 5% and at 7.5% for higher loan amounts of up to $4,999.
Delaware has no cap on interest rates but the average is around 25% per month. The title loan amount is usually up to 40% of the resale value of the vehicle.
Florida title loan lenders cannot charge more than 30% per annum for $2,000, 24% for the next $1,000 and 18% for any amount more than $3,000.
Georgia has capped interest rates at 25% for repayment terms of thirty days to ninety days. There can be additional charges thereafter.
Idaho has capped the repayment term to thirty days but renewals are permitted as long as the borrow pays at least 10% of the loan amount by the end of the term.
Illinois has no caps on repayment terms or interest rates. However, the loan should be amortized, which means there should be an equated monthly installment.
Kansas has no caps on rates or terms. Borrowers should have a minimum of thirty days to repay a title loan.
Title loans are legal in Kentucky and the rate of interest is capped at 36%.
Secured title loans cannot have an interest rate exceeding 36% in Louisiana and repayment terms shorter than sixty days.
Interest rate is capped at 36% per month and the loan amount is capped at $2,500 in Mississippi.
Missouri doesn’t have any cap on interest but most title loan lenders charge around 25% per month. The repayment term should be at least thirty days.
Minnesota caps interest rates at 10% for small loan amounts of less than $50 and 7% for $50 to $100, 6% for up to $350 and less than 3% per month for up to $1,000.
Montana has capped the interest rate at 36%.
You cannot borrow any amount worth more than 25% of your gross income in Nevada. You can apply for a maximum of 40% of the value of your car as a title loan.
You can borrow up to $10,000 as a title loan in New Hampshire, provided your car is worth much more.
There are no caps on interest and no minimum term requirements in New Mexico.
Oregon has no caps on interest and repayment terms are subject to negotiation with the lender.
Minimum repayment term is thirty days in Rhode Island but there is no cap on interest.
The minimum and maximum repayment terms are thirty days and a hundred twenty days respectively in South Carolina. There is no cap on interest but the rate should be fixed throughout the term.
Interest is capped at 36% and repayment term can be shorter than thirty days but subject to renewal, as many as four times.
The rate of interest is capped at 2% per month with thirty days to repay. There may be additional charges and repayment terms can be renewed.
The interest is capped at 10% per month but additional fees are not capped. There is no cap on loan amount.
Utah doesn’t cap loan amount or interest. There is no minimum term limit either.
You cannot borrow a sum worth more than 50% of the value of your car in Virginia. Rates are capped at 22%, 18% and 15% per month for loans up to $700, $1,400 and above respectively.
Wisconsin has no cap on interest. You can borrow as much as 50% of the value of your car or $25,000, whichever is lower. The minimum repayment term is six months.
Weigh your options, assess the quotes from relevant lenders and make an informed decision. Do not focus only on the rate of interest as there can be other fees. Always look for lenders with more lenient terms of renewal and lower penalties or late payment fines. If you can’t find a title lender near me, try searching the net for a lender that offers title loans completely online.