Title loans
There are many options still available in the marketplace for consumers to borrow money quickly and easily. In California, a car title loan is a good option for people looking to borrow $2500 or more using the vehicles equity as collateral. You do not need perfect credit to qualify since the vehicle is being used as collateral. A car title loan, or simply title loan, is a loan where the borrower provides their car title as collateral for the loan.
These loans are typically short-term, fully amortized loans with higher interest rates than other sources of credit, primarily due to the fact that the lender typically does not require good credit and that the only consideration for the loan is the value and condition of the car.
Most title loans can be acquired in 30 minutes or less depending mostly on how complete the paperwork requirements are receieved from the consumer. Most banks or financial institutions will not loan these small dollar amounts to someone without good credit. In addition to evaluating the vehicles actual cash value, lenders will verify that the borrower is employed or has some other source of income. Lenders do not place much consideration on the borrower’s credit.
Process
The maximum amount of the loan is determined by the collateral. Typical lenders will offer up to 60% of the car’s resale value, though some will go higher. The car must be paid off or nearly paid off so that we as the lender can be placed as a lien holder on the new title. Most lenders, including us, will require the borrower to have full insurance on the vehicle.
Depending on the state where the loan is transacted, interest rates can range from 36% to as high as 600% (APR). Payment schedules vary and are usually structured to allow the borrower to make monthly payments based on he amount of income they generate. If the loan is kept until maturity, and all payments have been made on time, the loan is paid in full and their are no further payments necessary.
Regulation
In California, the Department of Corporations licenses and regulates businesses that offer car title loans in California. You can learn more by visiting their website here.
California existing regulations.
- Above $2,500 the rate cap is exempt.
- Customer must be employed or have income source.
- Loans are fully amortized.
- Maximum $75 loan processing fee for loans over $2501.