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Most often, title loans are issued in relatively small amounts. The average loan typically ranges from $250 to $1,500. However, you can borrow as much as $5,000 or $10,000. Florida title loans are often used as a short-term financing option. Typically, the duration of these loans is around 30 days.
Your title is used to secure the loan, so the lender will hold onto it until you have paid in full. However, you are entitled to keep your motor vehicle and maintain your freedom of mobility.
Florida law requires lenders to follow certain guidelines in order to protect the rights of the consumer. For instance, there are interest rate caps that limit the amount a lender can charge:
- Up to 30% per year for the first $2,000 you borrow
- 24% a year for any additional money you borrow between $2,000 and $3,000
- 18% a year on any money you borrow over $3,000
How Title Lenders are Regulated
The title loan industry is regulated on a state-by-state basis. Federal guidelines do not exist, so it is up to each individual state to set their own rules. Two legislative statutes govern title loans in Florida. These statues are designed to prevent predatory lending practices. Specifically, Chapters 516 and 537 provide the framework for industry regulation.
Chapter 537 states that you and the lender must sign a written agreement before receiving a loan. The agreement must clearly outline the amount financed and the interest rate. You must also be provided with the contact information for the Florida Department of Financial Services - the state agency that is responsible for overseeing title loans. If you have complaints, this agency acts as a liaison between you and your lender.
Chapter 537 also explains that if you do not repay your loan within the designated timeframe, the lender can repossess your vehicle, sell it, and keep the proceeds up to the amount you owe. If there are additional expenses related to the repossession and sale, the lender has a right to collect this money as well.
If the lender plans to repossess your vehicle, you must be notified 10 days in advance. You will have the opportunity to keep your vehicle by paying back your loan and any associated expenses. In actuality, most title lenders are regulated under Chapter 516. However, this statute does not include as many protections. Specifically, information regarding repossession and extra fees are not clear.
The lack of tangible information means that borrowers must be proactive and ask questions regarding specific policies. For instance, some lenders do not clearly state whether you will be notified before the repossession or sale of your vehicle.
How Consumers are Protected
The statues set forth by the state are designed to protect Florida residents. Title lenders are required to follow these guidelines when performing loan transactions.
Before you sign on the dotted line, you should have a clear conversation with your lender. It is important to understand the terms of the loan and the associated charges.
Down the road, you do not want to be faced with a bevy of unexpected fees. Lenders must put everything in writing, so be sure to do your due diligence before handing over your title.
Finding a Trusted Car Title Loan Company
Finding a trusted car title loan company may seem like a daunting task. However, there are many lenders that are reliable and have your best interests at heart.
You should familiarize yourself with your rights as a consumer and understand the information contained in Chapters 516 and 537 of the Florida Statutes. In addition, ensure that your lender is fully licensed and follows all mandated rules and regulations. You should thoroughly analyze any document before adding your signature.
Perhaps most importantly, it is essential to find a company that meets your specific needs. You should feel comfortable in your decision and drive away feeling secure.
If you take the time to inform yourself and do your homework, a title loan can be an easy and efficient way to get the money you need.