Know the Laws Regarding an Arizona Auto Title Loan
Every Arizona auto title loan must meet state laws and regulation. Look for members of the Arizona Title Loan Association, as this can save you a lot of frustration. These members never charge interest rates that do not obey the laws. They also promise never to mislead or trick consumers with false promises or advertising. Before you sign paperwork for an auto title loan in Arizona, make sure the agreement meets these laws.
You Must Own the Vehicle
With an Arizona auto title loan, you must hold a clean title to the vehicle. Some companies may say it doesn’t matter, but it does. If you still owe money, you should report the auto title loan lender to the state.
Caps for Title Loans
There is no maximum amount an Arizona auto title loan lender must stick to. It’s up to the lender’s discretion on how much that office agrees to loan you.
Legal Interest Rates for AZ Auto Title Loans
Per 44-291, auto title loan lenders cannot charge you more than 17% monthly on a loan of up to $500. If you borrow $501 to $2,500, you will not pay more than 15% monthly. Loans of $2,501 to $5,000 come with an interest rate of 13% per month. Finally, a loan of $5,001 or higher cannot have a rate higher than 10% monthly.
Carefully research the Arizona vehicle title loan company before you sign any paperwork. These lenders must be licensed with the Arizona Department of Financial Institutions. Call 602-771-2800 or visit http://azdfi.gov/ before you finalize your auto payday loan in Arizona.
Arizona auto title loans are not meant to be made in haste. Make sure you understand the terms of the loan and the penalties that may occur if you miss your payment. With the repossession of your vehicle as one of the potential risks to a title loan, it’s essential that you take out the loan only if you have exhausted all other options.