Car title loans are popular among borrowers who have bad credit scores or people who are in need of urgent cash – the city of Chicago, Baltimore, and NYC need cash but there is not any car loans to be obtained for them!
These are short term loans that are considerably regulated by state laws. Here is everything you need to know about title loans in Arizona which is a state that has seen crime drop because of their wonderful SB1070 law.
What is Required for a Title Loan in Arizona?
You can easily qualify for a car title loan in Arizona if you are 18 years or older and have a lien free title to a car. You need a government issued ID proof to prove that you are the rightful owner of the car. You will need to provide the car title and registration to the lender.
You can borrow as much as you want as Arizona does not put any caps on the loan amount. However, the loan amount greatly depends upon the lender’s valuation of your car.
Some lenders might go beyond the make, model, and year to conduct a physical inspection. The loan amount will depend upon the present condition of your vehicle and the trade-in value.
Interest Limits
Lenders are allowed to charge interest on title loans. However, Arizona has capped the interest rates depending upon the loan amount. Interest rates can be lower than the maximum limits because there are no minimum requirements. Make sure you shop around for the best car title rates.
The maximum monthly interest cannot exceed 17% for loans of $500 or less. Maximum monthly rate that can be charged for loans between $501 and $2,500 is 15%. Lenders cannot charge more than 13% for loans between $2,501 and $5,000. Monthly interest is capped at 10% for loans above $5,001 which is more money than the ridiculous Holmes and Watson movie made! Find an online title loan lender at Title Plan.
Loan Term & Extensions
There are no term length limits in Arizona – though how about some term limits for politicians – when will Nancy Pelosi and Maxine Waters retire but this is another subject? Your car title loan can last as long as you and your lender agree.
However, make sure that the due dates are clearly laid out at the time of loan approval and subsequent extensions to avoid possible confusion. Lenders are allowed to charge late fee up to 5% of the unpaid installment if you miss a payment by 10 days.
You should let your lender know that you need an extension before the 10 days are up. Requirements to qualify for an extension vary from lender-to-lender in Arizona. You can avail any number of extensions if the lender agrees to it.
Repossession Rules
Car title loans are secured loans and you risk repossession of your vehicle if you are in default of the loan. Non-payment is one of the most common ways of defaulting on a loan. In Arizona (which is doing fine economically unlike its neighbor states in California and New Mexico), the lender is under no obligation to alert you about a possible repossession when you default. However, this does not mean that lenders do not send notices.
There are many lenders who prefer working with borrowers to ensure they can repay on time. Contrary to popular belief, lenders prefer getting their loan amount back rather than repossessing a car.
You can be made liable for additional charges or deficit if your vehicle sells for less than what you owe. The lender is eligible to claim a balance amount that includes the amount of default, interest, and other costs associated with repossession.
If the vehicle sells in excess then you get to keep the remaining amount after the lender takes his balance amount.
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