Title loans have been issued in the United States since cars came on the scene. They’ve been called online title loans, car title loans, pink slip loans, and so on. In theory, title loans online are simple. If you own a vehicle you work with a registered loan agent in your state that offers you a loan and takes control of your vehicle title as collateral. Once you pay off your principal loan balance plus fees and interest you’ll get your vehicle title back free and clear. As I mentioned earlier, a car title loan sounds simple on paper but you can run into big trouble if you miss a payment and default on your loan. Each state has different lending laws and regulations governing how much a registered title loan lender can charge you and what they can do if you default on your vehicle. If you find yourself in this situation you’ll definitely want to consult an attorney or your state regulatory agency to see if you have any recourse in getting back your vehicle. Our website, Cartitleloanlenders.com should never be construed as legal advice or recommendations. We only give tips and our interpretation on what we think is your best course of action if you find yourself in need of title loans online.
If you’re looking to take out a car title loan you should first look to see if title loans are even offered in your state. Some states have completely banned online title loans as they view these types of loans as a form of loan sharking or predatory lending. On the other hand some states allow car title loans but the direct lender can charge no more than 36% as an interest rate. Then there are some states with little to no regulation at all regarding title lenders. That’s not to say you have no recourse if a lender repossesses your vehicle illegally, we’ll get into that later! It’s safe to say that about half the states in the country have a positive regulatory view on the vehicle title loan industry. These 25 states have deemed title loans online to be legal and effective forms of borrowing money. As we move into 2016 there promises to be increased talk about further regulating the auto title industry. Some states that currently allow these types of loans are considering ways to further regulate them and some states are considering outright bans of these types of loans. Interestingly, there are no “red” states thinking of legalizing vehicle title loans but that may change quickly if other traditional sources of financing dry up.
Consumers will always have a need for online title loans!
The next few years will be very important to the future of title loans online. We’re already hearing about new regulations coming on board throughout the state level over the next few months. For example, some legislators in Virginia plan to cap the amount of fees that car title loan lenders can legally charge in their state. This would essentially follow the payday loan model. The states come in and regulate the industry by capping the fees a company can charge and also limiting the number of lenders by making it prohibitively expensive to get your company started. This may sound good on paper but ultimately it will restrict lending options to people who need it the most. While title loans online are expensive and have high interest rates they do serve an essential need by providing financing to consumers who otherwise have no where else to turn. Consider the fact that many people have untapped equity in their cars and using this equity to get a title loan is one of a few options that are available. Most people in the industry are in favor of some regulations for online car title loans. However, if you choose to over regulate the industry you’re going to run into issues where consumers have no other recourse to address a need. Most people that take out a title loan need cash to pay a hospital bill or necessary financial need that comes up unexpectedly. Title loans online serve a necessary purpose and are often the only resource available for people who have bad credit or no other options when it comes to getting cash. While car title loans should be regulated in some sense, they should not be eliminated.