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Spanish Lending Laws For Title Loans In Each State
Before you take out a title loan, you’ll want to see if this type of lending is legal or prohibited in your State. There are variations and different ways you can use the collateral from your vehicle as a loan, but that won't mean much if your state outlaws title loans or severely restricts the loan amounts or interest rates.
Simply put, car title loans allow consumers to borrow against the current equity of their vehicle. Cars older than ten years are ineligible for these types of loans because a car’s value decreases over time. With a title loan, the value of your vehicle is the main factor determining the loan amount and repayment term. It should be noted that this type of loan is not available in every state and that some states have lending tools similar to a car title loan but are available through legal loopholes. These can include registration loans and title pawns, and in most cases, you'll still be able to keep driving your vehicle with any of these lending options while you pay off the loan.
Difference Between A Car Pawn Loan vs. Car Title Loan
There is a significant difference between a car pawn loan and a car title loan. With a car pawn loan, you leave your car at the pawnshop and lose access to your vehicle until the loan is repaid. With a car title loan, you still have access to your vehicle, but the company that has loaned you the money has ownership over your car’s title until your loan is repaid.
State Requirements For A Title Loan
Each state has different loan criteria that they are looking at for borrowers to be eligible for a loan. Here are a few documents you may need before requesting a loan.
• Proof of ownership and a clear title - You must be able to show that you’re the sole owner of the car that you would like to request a loan on.
• Proof of income - It’s not enough to prove that you own the car, it must be clear that you can repay the loan. Proof of income would include some of the following: pay stubs, bank account activity, alimony, and other types of income received on an ongoing basis.
• Identification - Do you have a valid picture I.D.?
• How old are you? Some states allow individuals as young as 18 to apply for one of these loans.
• Pictures of your car - Is your car in good condition? If you’re applying for an online car title loan, do you have photos that prove your car is in good shape?
• An eligible paid off vehicle - Does your car qualify for a title loan?
You may find that your lender may request additional information from you. In some cases, lenders may also request a credit check. Again, this depends on the regulations in your state.
Car Title Loan Repayment Restrictions
These loans can range from 30 days to 48 months. The loan duration depends on the state in which you live. Loan duration is also related to a borrower’s ability to extend their loan duration or roll over their payments. In some states, borrowers are unable to extend the loan duration. In other states, they may be able to extend the duration of their loan by a set number of times. It is up to the borrower to understand the loan terms.
Default and Car Repossession
The most critical aspect of requesting a car title loan is understanding the terms of the agreement that you’re going into. Be clear on what will happen if you expect that you may be late for a payment, what your rights are as a borrower, and what will happen if you’re unable to pay your loan back in full.
Lenders in this situation can repossess your vehicle if you don't make the required payments. You'll have a certain amount of time to get the car back, but if you do nothing or can't pay the amount due, the vehicle will be auctioned.
