A car title loan refers to a short-term loan in which your car’s title can be used as the collateral. The borrower has to be the alien holder, that is, be the owner of the vehicle. Florida title loans are usually taken for less than a month, and if not repaid, the lender is allowed to take ownership of the car then resell it to a client to recoup the amount of loan given. Although you have to state your preferred interest rate when applying for the loan, if it’s a short-term loan, you may fail to realize that the quoted price is not annualized. Every state has its rules for imposing a car title loan. In Florida, for example, car title loans have become an attractive borrowing option for many individuals. They are easy to obtain. Also, unlike traditional bank loans, they don’t require a lot of paperwork. If you own a vehicle, you can always apply for a car title loan. However, you must be knowledgeable about the process of acquiring the loan in Florida. Here are a few tips to guide you.
How Much Do You Need to Borrow?
Most car title loans in Florida are for a few thousand dollars. Therefore, if you have a financial emergency within the same range, an auto loan could be the answer. But, if you want a car title loan to purchase a boat worth $60,000, you’ll be out of luck since car title loan companies in Florida will let you borrow up to 50% of your car value.
How Soon Do You Need the Money?
The car title loan lenders can process your loan in an hour if you fill out the application to start the process. Applicants have to submit documentation forms, and since a credit check is not a requirement, the paperwork is necessary to finish the loan process. Simultaneously, the time taken to process the loan is significantly reduced. A car title loan is often necessary when the time frame is of the essence.
What are Your Alternatives?
In the event of a financial emergency, do you have other means of getting what you need? There are many options of borrowing including taking out a second mortgage if you own a home. Alternatively, payday loans are a great option, but they are often for a smaller amount. It’s important to weigh all your options before committing to the car title loan.
Understand What You will be Required to Pay
The Florida law allows the title lender to charge interest of up to 30% annually on your car title loans and 24% annually for any amount borrowed between $2,000 and $3,000. This means that in case you borrow $1,000, you’ll be expected to pay $1,000 as the principal.
Garner the Facts You Need
Florida laws have a regulation for vehicle-secured finance loans. Chapter 537 of Florida Statutes stipulates that the state must license lenders. Under the same law, for you to receive a loan, you have to sign a written contract. Understand the agreement before signing the paper.
A car title loan is based on the value of your vehicle. There is no considerable paperwork to fill out during application. All it takes is completing the easy application form on the lender’s website and receiving a quote.