If you live in Alabama, all of the laws and regulations regarding car title loans can be found in the Alabama Small Loan Act. This piece of legislation defines important terms used in the car title loan industry, certain rules small loan lenders have to follow, and more.
The Alabama Small Loan Act also discusses the types of interest rates that small loan lenders are permitted to charge. Don’t let a potential lender take advantage of you by charging you more in interest fees than the law allows. Thankfully you don’t have to trudge through all 20 pages of the Alabama Small Loan Act to figure it all out—LoanMart did the research so you don’t have to.
There are some rules that every single small loan lender must follow when it comes to charging lenders interest. Here’s a breakdown of those rules:
- The interest fees you are charged must be included in the loan balance.
- Interest rate charged must be less than $200 a month.
- Maintenance fees can also be charged in addition to interest charges.
- If the borrower is more than 10 days late on a payment, the lender is allowed to charge up to 10% interest on the unpaid amount.
If you’re looking to get yourself some funding through a small loan, like a car title loan, you definitely want to be aware of these rules, so you know which lender is right for you.
When you receive your initial loan balance, that number includes the interest fees that you are charged. That means if you have a loan balance of $2,000—that number should include your interest charges. When small lenders charge interest, they are not allowed to charge a borrower any interest fee that would come out to more than $200 a month—keep that in mind when you are paying back your loan.
Most lenders also charge a maintenance fee for keeping track of the borrower’s financial documents, history, and information. But be aware that this fee cannot exceed $30 in total, so potential small loan borrowers are probably looking at a maintenance fee of about $3 a month.
You want to make sure that you stay on top of your payments if you decide to get a small loan. Falling behind on your payments may look bad on your credit and it could end up costing you more money in the long run.
Another very important rule to remember is that if a small loan lender breaks any of the laws laid out in the Alabama Small Loan Act the transaction is completely voided, and the lender no longer has a right to receive any more money from you at all.
What are the Interest Rates for Other Kinds of Funding?
There are other types of funding out there besides car title loans, however. But be aware that these loans can have very different rules. Here are some other types of funding that could be potentially available to you if you are looking for fast funding:
- Payday loan
- Signature loan
- Registration loan
- Cash advanced loan
All of these types of funding have one thing in common: they all almost always come with extremely high interest rates. For some of these types of loan funding, interest rates can be as high as 300 percent! This kind of interest rate could result in you paying more than triple your original loan balance, and who would want that?
Furthermore, these kinds of funding also come with very short payback terms. Typically, the average expected payback terms for a payday loan is about 30 days. That would mean that you would have to pay back your entire loan amount in just a month or less.
Thankfully there are other types of funding out there for you…
What are the Interest Rates like at LoanMart?
LoanMart may be a great place for you to get fast funding without absolutely drowning yourself in interest fees. LoanMart has competitive rates and convenient terms that are designed to make paying back your car title loan manageable.
In fact, you can even work with your LoanMart car title loan agent and have some input in determining what your interest rates and payback terms will be1.
LoanMart offers competitive rates that some traditional lenders just can’t afford to offer. LoanMart is the kind of company that cares about you, so if you ever feel like your payment plan isn’t working for you anymore, we will be more than happy to revise or even create an entirely new payment plan with new competitive rates and convenient terms that work better for your unique financial situation.
At LoanMart, you can also enjoy convenient terms ranging from 12-48 months. Don’t worry about having to pay back your entire loan in a month. When your LoanMart car title loan monthly installments are spaced out, your payments may be a stress-free experience.
When you choose LoanMart, you could get your title loan funding in as little as one business day3. It just takes 5 minutes to get started, so inquire about a LoanMart auto title loan today!