Florida Car Title Loans: Things You Should Know
Car title loans are secured loans in which individuals and car owners borrow money using their vehicles as collateral. This type of loan helps people settle incidental and unplanned expenses.
Car title loans are also known as auto title loans, they are short-term loans (usually last for 30 days). For car title loans, the value or worth of a vehicle determines the amount of loan that an individual gets. Loans of this nature vary from state to state, but some general rules apply to auto title loans.
For instance, Florida car title loans allow you to borrow money based on your car’s worth and you are required to repay the loan within the agreed time. Florida car title loans can be as small as $250 and as high as $10,000.
Things to consider before taking Florida Car Title Loans
There are specific regulations that guide Florida Car Title Loans, these are the Florida Statutes and the Florida Title Loan Act. These regulations stipulate the interest rate, loan agreement, and other requirements. For instance, Florida allows an interest rate of up to 30% on a car title loan, while some lenders can charge below 30%, no interest can exceed the stipulated rate.
Auto title lenders are issued a license to operate in Florida, ensure you deal with a licensed lender. Florida law also mandates a written and signed agreement between the borrower and lender in an auto title loan.
On the surface level, taking Florida car title loans to settle incidental expenses and contingencies might look attractive. But this is not always the case. Do you know you stand the risk of losing your vehicle in an auto title loan? Yes, borrowers that fail to meet up with terms of repayment can forfeit their vehicles in the long run.
Asides from the title of your vehicle which you use as collateral, you will also pay lender fees when taking a car title loan. In most cases, 30 days is the loan period, at the end of 30 days, all repayment must have been made.
Understand the risks
In Florida car title loans, the law allows for the repossession of a borrower’s vehicle by the lender if he defaults on repayment. In cases where borrowers have genuine reasons that made payment within the agreed time impossible, an extension can be given by the lender.
Once the grace period elapses, the lender can repossess the vehicle used as collateral and sell it to recoup the loan amount. Any excess amount made from the sale of the vehicle belongs to the owner.
There are also rules guiding the repossession of a borrower’s car and its eventual sale. For instance, the vehicle owner must receive a notice of sale 10 days before the sale is done. A proper account must also be given, including how much the borrower owed in total, how much the vehicle is sold for, and the balance left from the proceeds of the sale.
The Florida state also has a channel and designated office where complaints emanating from car title loans can be made and resolved.