State Laws & Regulations Regarding Car Title Loans

Vehicle equity loans have existed in the United States since cars first came on the scene. We call them online title loans, vehicle registration loans, pink slip borrowing, and so on. In theory, online title loans are simple effective ways of obtaining money for a paid off vehicle. The process of getting cash for a pink slip is much different now than what it was a few decades ago. The theory is much the same though, as you will use a vehicle as collateral. You need to find a registered and legitimate loan agent in your state that offers financing and takes possession of your vehicle’s pink slip. Once the principal loan balance is paid off, plus fees and interest you’ll get your vehicle title back free and clear. As mentioned earlier, a title pawn sounds simple on paper. In some cases though, a borrower can run into big trouble if they miss a payment and default on a loan. Each state has different lending laws and regulations governing how much a registered loan lender can charge. These rules also control what a company can do if you default on your vehicle. State regulations about online title loans are important. It’s also crucial to consult with Federal Government regulations before settling on a pink slip loan. We also recommend to consult an attorney before you move forward with a company. You should also reach out to your state regulatory agency. By doing this you can see if there’s have any recourse in getting back your vehicle. should never be seen as giving legal advice or recommendations. We only give tips and general information to make the application process easier. Our content throughout this site is only an idea of what you should do if you’re looking to get fast cash for your vehicle..

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Are you looking to take out an auto equity loan? You should first look to see if auto equity funding is even available in your state. Some states have completely banned title loans online. This includes funding from direct lenders and credit services organization. Some states view these types of loans as a form of predatory lending. Our newly updated list of title loan companies has a great breakdown of lenders by state. Some jurisdictions completely allow car title loans. In those cases 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 about lenders. That’s not to say you have no recourse if a lender takes your vehicle, we’ll get into that later! It seems that half the country has a positive regulatory view on the equity vehicle lending industry. These 25 states have deemed pink slip financing as a legal and effective forms of borrowing money. These jurisdictions regulate and enforce restrictions on registered companies. They have chosen not to restrict capital and ban firms in the state. These states give consumers with few options an avenue to get short term cash. As we move through 2020 there will be talk about further regulating the auto title industry. Some states that allow these types of loans are looking to regulate them further. Others are considering outright bans on these types of loans. We’re not seeing any “red” states thinking of legalizing vehicle title loans. That can change if other traditional sources of financing dry up.

Consumers will always have a need for short term 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. Legislators in Virginia plan to cap fees that car equity lending companies can charge. This would follow the payday loan and installment financing model. The states come in and regulate the industry by capping the fees a company can charge. Much like what we see with installment loans, most states set a minimum amount that any resident can borrow. They also intend to limit the number of lenders by making it expensive to get a company started. state borrowing rules An example of this is what happens in California. The State already has extensive regulatory requirements for lenders. California requires large amounts of capital and legal proceedings to start a short term lending company in the state. This may sound good on paper but it restricts lending options to people who need it the most.

We know title loans online are expensive and have high interest rates. But they also serve an essential need by providing financing to consumers who otherwise have nowhere else to turn. Using a pink slip loan to access this equity is one of a few options that are available. Consider that many people have untapped equity in their vehicle, motorcycle or boat. Most applicants will see an approval if a few conditions are met. They will need to provide a valid bank account and proof of income. Most companies won’t bother to check your credit score. Industry experts are in favor of some regulations for online car title loans. If we over-regulate the industry there will be consumers who have no real financial choices. Most people that go this route need cash to pay a hospital bill or a necessary financial need that comes up. Title loans online serve a necessary purpose. These loans are often the only resource available for people who need fast cash. They can’t qualify for installment loans because of a bad credit score. Many have bad credit or no other options when it comes to getting cash. While car title loans should see regulation in some sense, they should not be eliminated.