Car Title Loan Laws

Car title loans is sharply on the rise. If you are considering loaning out your car title for quick cash, then you should be in the know about your state's requirements for loaning out your car title.

Understanding Your State's Law

There is a federal law that requires licensed agents to fully disclose all the details and requirements when loaning money on your car title. Federal law also requires those who are loaning out their car title to be at least 18 years old, as well as being able to provide current proof of residency, a valid car registration, and a clean driving record. When applying for a loan, you will need to work with a registered agent, licensed in your state, by the state. It is also important to note that each state has different laws when it comes to lending and regulations to how much the lender can charge you for both principle and interest, but most importantly, when and how they can repossess your vehicle.

In fact some state do not even allow the usage of loaning out your car title, for they see it as not on the level, if not illegal. For the states that do allow loaning out your car title, they tend to have maximums that the registered agent can charge for interest rates. Some will not let them go higher than 36% APR, while yet some other states have next to no regulation for interest being applied to a car title loan. APR rates for car title loans can reach up to 360%. As of now, there are approximately 25 states that allow the usage of car title loans. States like Virginia that approve of car title loaning, are not only setting maximums for fees, but also for the number of those who can lend out money, thus making it difficult to start a car title loaning company.

If you have further questions pertaining to state regulations for car title lending, feel free to get in touch with an attorney that specializes in these matters. Above all, when you get approved for a car title loan, be sure you have the ability to pay off the loan plus the applicable interest on time. Failure to keep up with payments can and will result in your vehicle being repossessed. Different states have various rules as to when and how the agency can repossess vehicles, and possible ways to have this resolved.