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, online title loans are simple effective ways of obtaining money for a paid off vehicle. Of course, the process of getting cash for a pink slip is much different now than what it was a few decades ago, but the theory is much the same. 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 as collateral. Once the principal loan balance has been paid off plus fees and interest you’ll get your vehicle title back free and clear. As mentioned earlier, a car title loan sounds simple on paper but a borrower can run into big trouble if they miss a payment and default on your loan. Each state has different lending laws and regulations governing how much a registered loan lender can charge you and what they can do if you default on your vehicle. State regulations concerning online title loans are important. It’s also crucial to consult with Federal Government regulations before settling on a pink slip loan. 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. Our newly updated list of title loan companies has a great breakdown of lenders by state. 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 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 pink slip financing to be legal and effective forms of borrowing money. While they regulate and enforce restrictions on registered companies, they have chosen not to restrict capital and ban firms in the state.
This is important as it gives consumers with few options an avenue to get short term cash when they need it most. As we move through 2017 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 on 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 a number 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. They also intend to limit the number of lenders by making it prohibitively expensive to get a company started. An example of this is what happens in California. The State of California has extensive regulatory requirements that require large amounts of capital and legal proceedings to start a short term lending company in the state. fThis 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 nowhere 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 go this route need cash to pay a hospital bill or a 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.