The car title loan industry has been around for a long time. Like most things in the money borrowing world, car title loans are regulated by the government. The car title loan industry is always changing to protect the consumers who take out these types of loans. If a person is thinking about obtaining a car title loan, it is important to know how the title loan industry is changing and what that means for both lenders and borrowers alike.
Changes in the Car Title Loan Industry to Protect Borrowers
Unfortunately in the past, there have been title loan lenders that have acted in a predatory manner towards those who need to borrow money. Although there are steps that borrowers may take to protect themselves from these types of lenders, the government is also there to help.
Government agencies such as the Consumer Financial Protection Bureau, regulate the loan industry so that lenders cannot practice deceptive tactics or take advantage of potential borrowers. In 2017, there were a few new rules issued to protect borrowers:
- The Final Rule– The final rule has two major parts to it. The first being that lenders cannot give out loans before first determining if the borrower can reasonably afford to pay back the loan, interest, and fees. Additional costs are also known as a balloon payment. In addition, lenders need to make the re-payment terms reasonable for borrowers. The second part of the final rule states that if a loan’s annual percentage rate (APR) is above 36% and is taken directly from the borrower’s account, then the lender must collect the money in a specific way. If two consecutive payments are missed, then the lender cannot take another payment UNLESS they are authorized by the customer to do so. Before they take out money the lender has to give their borrower a notice. This legislation went into effect on January 26th, 2018.
- Limiting the Loan Amount a Person Can Obtain– The government has recently introduced a maximum amount of lending that an individual can borrow. Lenders must set a maximum for their loans and inform their borrowers. This limit protects borrowers from becoming overwhelmed by the high costs that are associated with having multiple loans.
Changes in the Car Title Loan Industry to Make Funding Easier and Faster
As the needs of borrowers change, the car title loan industry also learns to adapt. Here a few ways the car title loan industry is changing to reflect the needs of borrowers.
- More Car Title Loan Lenders Available- There are many lenders that are beginning to provide title loans in addition to traditional loans. So, the loan industry is slowly growing.
- More Lenders Providing Online Loans- This is one of the largest types of growth out there. There are new lenders emerging that are solely online based. There are a few reasons why title loan lenders are offering loans online. By lending money online, lenders may reach more people, potentially generating more business for themselves. Many people find that taking out loans online is a much simpler and less time compromising process than in-person or over the phone.
- Ease of the Approval and Funding Process- Getting approved for a title loan used to take days or even weeks, but nowadays the process is getting quicker. In fact, some lenders can figure out approval in a matter of hours. There are a few reasons why this change has occurred; there are more lenders out there (specifically online lenders) and they compete with each other to make the process faster and easier. Also, many Department of Motor Vehicles locations allow for online access to title information so everything may be sent over for approval instantly.
Why Choose LoanMart for a Car Title Loan?
When it comes to car title loans, LoanMart is an expert in the car title loan industry. Here are a few reasons why you may choose to consider LoanMart for a car title loan:
- We have competitive rates1
- We offer online account access
- We are a reputable lender
- Our process could take less than an hour3
- We have a simple 3-step process1
To get started with LoanMart, you may begin the process online, by calling us at 1-855-422-7412, emailing us at firstname.lastname@example.org, or by visiting a participating store to apply in person.
The title loan industry, like many regulated industries, undergoes changes via the laws set by the government. In addition, car title loan lenders adjust their policies and the way they conduct business based on the needs of their customers. Before taking out a car title loan, it may be helpful to be aware of these laws and to do some research on the lender. There are many car title loan lenders out there and picking the right one has never been easier with LoanMart.