Texas Car Title and Payday Loans
Per the Texas Administration Code 83.604, Texas does not have a maximum payday loan amount, but there is a limit of 7 to 31 days for the length of a payday loan. The most a company is supposed to charge you is $18 for each $100 for a loan of $300 or $8 for every $100 borrowed on a loan of $2,500. Companies may also charge administrative fees of $25 for loans of $1,000 or more or $20 for loans of less than $1,000. If you do default on your loan, the company can then charge $5 per every $100 borrowed.
To break this down, if you borrowed $500 and the fee was $18 per $100. You'd originally owe $500 plus $18 times 5, which totals $90. You go on to default and now owe the original $590 plus another $25 in fees for defaulting, plus you might face fees from your bank for the post-dated check that has now bounced.
What's most important to understand is that when you borrow money from a payday loan online in Texas, or even a loan you take out in a storefront, you must pay it back. If the payday loan company goes to cash your post-dated check and that check bounces, they may threaten or actually have you charged with breach of contract. This practice is illegal, so if you run into it, let them know that threatening to arrest over unpaid debt is illegal in Texas and that you're contacting an attorney.
Texas car title loans are different. Instead of a post-dated check due on the repayment day, you put your car's title up as collateral. If you fail to repay the loan amount and fees, the title loan lender in Texas can take possession of your car. If you want your car back, you may be required to pay the original loan amount, towing costs, and storage fees.
General Laws Regarding In-Person and Online Payday Loans in TX
In Texas, the Texas Fair Lending Alliance reports that consumers who receive payday or title loans pay about $23 for every $100 borrowed. Of those who do take out these cash loans, much of the money is used to cover rent, car loans, and utilities. People who use Texas payday loans or title loans to cover bills between paychecks have little other choice as they do not qualify for traditional bank loans. If you're one of the thousands considering Texas title or payday loans, here are a few of the laws that can help you decide which payday loan company is best.
TX Car Title and Payday Loans Laws For Specific Areas
In addition to Texas payday loan and title loan laws, there are often laws applicable to certain towns and cities. Dallas payday loans are restricted by two ordinances passed in 2011. Stores offering payday loans within the city are restricted to operating in certain areas and there is a limit on how much you can borrow with payday loans in Dallas.
In 2017, the payday loan industry in Killeen, TX, was met with new regulations. Lenders must ensure the borrower is not borrowing more than 20 percent of his or her monthly income. Plus, Killeen payday lenders cannot operate without a city permit.
Even car title loans in many cities in Texas are seeing new regulations. Cities like Austin, Dallas, Houston, San Antonio and dozens of others limit title loans to 70% of the car's current value and 3% of the borrower's yearly income, whichever is lower. These same cities are also working on passing two bills that would restrict borrowers from rolling over a payday loan more than three times and each time 25% of the amount borrowed would need to be paid off before the Texas payday loan company could approve the rollover.
Texas Car Title and Payday Loan Laws in a Nutshell
Whether you are in Texas or from anywhere at all, chances are you have been in plenty of situations where you could use some quick cash, were in a bad situation, and needed a helping hand. There are many options here in Texas for you to turn to when you are in times of need like that. The entire process itself can be very convoluted and confusing, however, and it's unclear who you should really trust here. If that describes you, then you've come to the right place!
If you want the best possible place to get a payday loan, and have something like a car to offer as collateral, then you are more than welcome to come to this website and have all of your problems fixed in an instant. Featuring the best system we've seen, very trustworthy representatives behind it all, and a certain brand of pizzazz that only comes from Texas, you have found your savior with the website like this. We can't see how it compares to pay day loans offered in other countries, or another states. In Texas, however, this is the place to go to, and you definitely will not be disappointed by what you find here!
What is a Payday Loan?
Although the name itself is very informative, people usually don't know what a payday loan actually is. You will find plenty of people and very bad situations that could use them, but you are really find someone that thinks to go for a payday loan when they get into those situations. Payday Loans have a good and bad reputation depending on who you talk to, and all that can be somewhat daunting if you were unfamiliar with the way that it all works, or how loans work in general. We will do our best to help you understand all that, so you can further appreciate why we recommend a service like this one.
Most people know what a loan is. If you have ever purchased a car, or a house, or start of the business, then you absolutely know what a load looks like and how it works. If you have ever gone to school taking out student loans, you also probably understand that too. Those are all the most common types of loans that people take out, being paid back over a very long period of time, and having a certain interest rate that tends to be relatively low but can add up over the coming years. This is how all loads of that nature work, and if you are getting something that does not have an interest rate like that, you are being lent money, but not loaned it.
The main way that a payday loan differs from a more traditional loan of the type we are all used to getting is that for a payday loan, the terms are very short. These are so short that you might not even consider it a loan, but rest assured, it still counts as one! Usually, at the most, a payday loan is a amount of money that is only meant to be paid back within a few weeks. This is a huge difference from a normal loan, which lets you pay it back on almost any terms that you would like, so long as you're OK with being charged interest over a longer period.
The short term nature of the loan makes it ideal for many people. If you have ever been short on money needed to pay rent, have a sudden medical expense come up and need to have it all taken care of within a short span of time, in general believe that you normally would have been able to afford something but right now, for whatever reason, you cannot, a payday loan is something that you would be in need of. These are not loans meant for people that do not have the money now, and will never be able to have the money for a long span of time. That is the opposite of a payday loan, if there is an opposite to this sort of thing!
What a payday loan is good for is for someone that was normally going to be able to have some money to afford something, but in the short term, needs just a little bit more time. Rent is the most popular source of payday loan crisis, as are unfortunately several drug habits, but we will assume that everyone here is on the up and up, and has a legitimate problem that they are needing to solve! For situations like this, or if you are simply late making a payment for another loan or a credit card, you can take out a payday loan to get cash fairly quickly. Instantly, in fact!
Payday Loans are Fast!
One of the perks of having a payday loan is how quickly all of it works. A traditional loan is over a long-term period of time, and a contractual obligation on both parties for the foreseeable future. Because of this, and that some loans may be paid back over the course of 30 years, a loan of that kind takes quite a bit of time to go through. Various background checks are conducted, interviews are made, tax forms and employment information is submitted, and all kinds of things that would normally be well-suited to a job interview. It is a very involved process, involves typically very large sums of money, and all kinds of things of that nature.
Because a payday loan is needed very quickly, absolutely none of that would be remotely feasible for it to work! If the amount of time required to give a normal loan were necessary for a payday loan, a payday loan would not in any way be given to you in time for you to use it as intended. Your rent would already be well overdue, your credit card payments would be far past due, and pretty much anything that you could imagine as a negative! On your life. This is one of those times where expediency is a virtue, and everything around a payday loan is organized to meet that demand, for both better and for worse.
Much like a traditional loan, a payday loan out all of the associated paperwork and applications can be done in simply minutes. It is rare for a payday loan application to take longer than that, and if you have already gotten a payday loan from a particular supplier before, then you can simply go in and request a new one and it will take no time at all. These things are pretty much the fastest form of all you can possibly get, and are admitted be a very good thing for people that really do just need money in the short term basis and compare back very quickly. This describes many situations, and for that reason, there are plenty of legitimate uses of loans like these, making the image of payday loans as predatory entirely unwarranted. Unless you are spending the payday loan money on something stupid, which isn't a criticism of the loan itself, but your own financial decisions. We all spend money on plenty of stupid things all the time, and if you are going to decide to do that, be of a solid enough character to take responsibility for your own actions!
How Long Does it Take to Start?
Once a payday loan application is done, which can only take a few minutes at most, you are pretty much given money immediately. The only things they tend to verify with a payday loan is the fact that you actually do have an income that comes in regularly, and some manner of savings account that they will be able to deposit money into it potential he take money out of. Their check your income because they need to know if you actually can't repay them. For that reason, payday loans or not give it out to people that really do have no way of paying them back. This is another one of the sources of the pay them having a bad reputation, with people thinking that payday loans are given out to just anybody. Like many myths, this is not true, and the pay day loan person makes a quick but valid assessment on your ability to pay them back in a timely manner that will work out for both of you, and leave neither of you in any considerable amount of debt or torment.
After you get your loan, which will take only minutes if you have all of the required paperwork at the ready and understand everything, you will be given Long is basically at that time then and there. Depending on how fast your bank account to process something, you may have a slight delay, but it is pretty much instantaneous. It is very rare for a payday loan place to give out actual cash money to you, as that does not leave a trail of paperwork, and makes it much harder to make things done and they are official capacity that the government would respect. If you see a payday loan place that specializes in giving you straight cash, and has no paperwork, that is probably the sign off on that caters to people that need money for less than admirable things.
After this money is deposited into your bank account, which the loan officer will verify before it is conducted, you are required to give them a amounts of money in a post dated fashion that will pay back the loan that you just took out, and the interest that they determined to charge you. You are made well aware of the interest before the time the loan is given out, so there are no surprises there. You will not be given a loan for a certain amount of money and they charge 100% interest on it if they did not tell you before hand, and that would be an awfully high amount of interest for anybody to charge you, and is very unlikely. You will be kept aware of all of the amounts and fees and charges involved at every step of the process, all before you are ever allowed to make the loan itself, agree to it, or receive any money. If in anyway you cannot understand that, they will usually be unwilling to give you alone, because they do not want to deal with people that are unhappy with their service.
One of the unique nature is of a payday loan service is that you will be giving them a check that is dated to a specific date that you both determine you will definitely be able to pay them back by. This check will include the exact amount of the loan itself, and all of the interest that you agreed to pay them for that loan, which is quite literally the fee you're paying to get a loan from them in a very short and fast period of time. This is unlike other loans, which will invoice you and send you a bill for you to pay on every month at your discretion. Of course with those loans, if you do not pay, the interest only your cruise, and your credit rating will go down.
What are Some Real World Examples of Payday Loan Clients?
As a very concrete, real world situation that this would apply to, let's talk about our friend Brad. Let us see that Brad normally has to pay $2000 on his mortgage every month. Or maybe he is paying rent. Either way, he has to pay $2000 on something every month. He is a little bit short this month, however, and still wants to be able to make his payment. He knows that he will be able to get the money to weeks after the payment date, so he seeks out a payday loan service. This service decides to give him the $2000 he needs, and charge him something around the order of a 10% interest on the money. He has given the money after filling out some forms, and gives them a check for $2200, dated to three weeks ahead of when he is given the money. He may even date the check sooner, depending on when he feels he will have that money. That in and of itself is the entire payday loan process, and is a far cry from what many people tend to make it out to be when trying to criticize it.
Part of the reason payday loan services get criticized is because of two main things. The first is that they are often confuse with loansharks. A loan shark is someone that loan someone some money and does not believe that he will have the ability to pay him back. Or at the very least, when the loan is given, no effort is made to ensure that the one receiving the loan will be able to pay it back in the manner agreed-upon. A loanshark from there will increase the interest and tend to scare the crap out of the one taking the loan, which is a source of drama that you will see in many movies about the mafia.
A payday loan really is a very short term loan that has a higher than average interest rate when compared to loans that are given out over the span of several years, if not decades. That really is the only difference between the loans, along with the payment being written at the time of the receipt of the loan, because of just how short term these loans really are. They make up for that because they will give you money on the spot, deposit it directly into your bank account after having your background check and ensuring that you will indeed be likely to pay it on the date you have agreed to.
The Myths About Payday Loans are Just That
That is all a lot less dramatic and fun to talk about them what you will see on an episode of the Sopranos or any number of TV shows, which is why the actual nature of payday loans tends to get a bad nature. Rest assured, however, that really is it, and as you can see, has a wide variety of uses for people that are getting into a jam. Many times the short term consequences of not paying for somethings are greater than the amount of money charged as interest, or at least to the person taking out the payday loan. If you have been late on your rent for a number of months, for example, a landlord is likely to kick you out. If you're late paying for child support, in the same way, a court is likely to reprimand you for it. They are all manner of things that taking out a payday loan can help you with when you need cash in a hurry and your friends are not wealthy enough to be able to help you out, or are you at the very least would not like to ask them.
It goes without saying that with all loans, you will technically be paying for the service, and it is financially better for you if you do not take out a loan at all. There is clearly value to being able to spend money now in the present rather than waiting forever, however, or the entire enterprise of loans would never have existed. Imagine if you waited a full 30 years before you were bought a house! Only old people would be able to live in their own homes, and other ludacris things of that nature. Or if you needed to start a business. You would have to wait until you were already a millionaire to do it, and by then, you already would have done enough that you would not need to.
There is a very clear, and very legitimate, market for loans of various types. The broader alone market that people are used to talking about caters to people that are making very long-term purchases with a lot of uncertainty as that payment cycle approaches each and every month. With payday loans, however, the interest prices increased, and the terms are made much shorter, in exchange for being given a much larger son of money on the spot, and having a very low bar for being able to receive a loan at all.
One of the people that pay day loan providers tend to cater to the most are those that have a very poor credit history. As you might expect, with relatively small amounts of the order of $5000 or less, you can probably be better off just using your credit card and paying it back later. The interest rate on credit cards would be similar if not better, and the entire thing would be a lot more convenient without you having to go out of your way to do it. You will be given a much harder time if you have a poor credit rating, however, and in particular, if your credit is so bad that you cannot afford things like that on a credit card! This is another one of those things that causes pay day loans to come into existence. There are a large variety of people that will not be able to use credit of any kind for an amount so that would normally be reserved for something like a credit card, or asking for money from your friends and family. These are the type of people that, even if they're normally would have the money, a payday loan is absolutely well-suited to. It is almost like a credit card for them for people that have poor credit, and also tends to be popular among that crowd.
Who Gets These Loans?
Other people that tend to be given pay day loans are often those that do not have a credit history at all, which is a sure fire way to never be given a loan of any kind anywhere else. There are a variety of legitimate reasons, and some of them are quite admirable, that you would not have a credit history. One of them is simply not participating in the credit system, having no credit cards or things of that nature, choosing instead to do things the old-fashioned way by saving up and paying with your own money. There is nothing wrong with that, but it does make it hard to get money in a hurry when it comes time to pay something when you come up short.
If you are living from paycheck to paycheck, and don't really have any sort of savings account of any kind, you are also very likely to be in need of something like their payday loans. For many people like this, which can make up a very large portion of the population, you really may not have anywhere else to turn to when you need to make up that extra difference. Even your friends in that situation probably do not have enough money to help you out, nor your family. There really is nowhere for you to turn to, which is why pay day loans come into play. They are very popular for a reason, and are nothing to be ashamed of. They simply work for a large variety of people, all of which enjoy them and appreciate them.
Most of the time, people in this situation were in counter some form of crisis, which leads to a sense of urgency that they need some money. This is the most common way that most people get into a payday loan, and if you are reading this while searching for payday loans, it will probably describe you! Or at least someone you know. You will often be in a situation where you need a lot of money in a very short period of time, and you may not have the luxury of having good credit or ample savings. There is nothing to be ashamed about when it comes to that, and that's just how it is for a lot of people.
Not everyone makes a lot of money. Not everyone is from a rich family. And not everyone lives in such a way that they have the luxury of being able to save up enough money to last them for a year or more, or to handle any emergencies that should arise. This is the way that everyone would likely aspire to live by, but not everybody is there right now, and because of a variety of circumstances, realistically, many people may never actually make it to that point. That is not to say it would not be nice if they could get to that point, and be able to handle things without the need of a payday loan, but this is all I can to trying to lose weight or be healthier. Everyone in theory can't do it, but not everyone well. We all respect those that do, but there's no reason to throw everyone out into the cold if they could not manage to make it work themselves. A payday loan is a lifeline for people like that, which realistically, probably outnumber everybody else!
A Wonderful Working Example for a Small Business
Another, cause of a payday loan being needed is having car trouble. Many times, car troubles come up unexpectedly, and can't be debilitating and some environments. If you live in a city with lots of public transit, you can probably get by for a week or more without having to use your car. If you live in the ground majority of the world, however, and are in a country like America, you kind of need a car to get around. Unless you plan on working from home indefinitely, until you save up for another car and have it delivered to your door!
If you are someone that uses your car to work, you also have more reason and incentive to get it up and running in a far faster span of time that you might financially be able to do. Say you are an electrician, or a contractor. In this example, your car suddenly got into an accident, and needs part of it fixed and replaced. After taking it to a shop, you are told that it is going to cost you around $2000 to fix it. You do not have the money right now, but would if you continued working for an additional month. Without your car, however, you cannot actually work. You will have no way to fix it, and are out of work on top of it!
If you are a responsible contractor or electrician in this way, you can simply head over to a payday loan place after being given an estimate via auto mechanic, show that to them along with some background information, and be sure to tell them about your earnings and give them some proof of that. Once they have that information down, within minutes, they will be more than happy to give you the money you need to fix your vehicle and get back to work. They are quite literally giving you the money to save your business and continue working, which without that money, would have come to a complete screeching halt.
In this way, a payday loan can be a lifesaver, and be what protects you from losing out on your job, if not the entire day of your livelihood. Many people that criticize payday loans do not take into account situations like these. These happen far more often than people and ivory towers that make those criticisms tend to believe. These people are used to taking out loans for things like houses and cars, which are of an entirely different magnitude of purpose than a payday loan.
They Help with Medical Bills
Going to the hospital is also another popular way to get into the payday loan process. Many times, especially if it is one of your loved ones, you may need to pay a certain amount of money to have a procedure performed. This may happen to your pet as well, that has a huge burden on them by a vet to pay the money, and only has you to turn to to pay it. Many veterinarians will not operate on an animal if you do not pay in advance for expensive procedures, and your loved one can quite literally die right there on the spot if you can't assure them that you can pay! In a situation like that, in an ideal world, you would turn to your rich and generous friends and family for help. They would not even ask you to pay them back! Maybe even people from the street would give you money to save your loved one. In the real world, however, your day has been ruined, if not your month, and you need some money in a hurry or your dog or cat is going to die. And this scenario, you can go to a payday loan office, which much like an angel, will give you all the money you need to fix your cat or dog trouble.
Criticisms of Payday Loans Miss the Point
To be sure, relative to the size of the loan, payday loans have among the highest interest rates that you could find in the entire credit loan industry. It is not unusual to be pairing along the order of $75 for a law that is only a route $400. And if you are regularly taking worlds like that, the interest rate could rise to 200% or even much higher. It is not unusual for frequent people getting loans like these to be paying more money at Lowe's that they are actually getting from them! This is a travesty to be sure, but also a situation where the problem really is not the loan, but the one that has not got their life together enough to need them and situations that are not emergencies.
Another criticism of payday loans that tends to be thrown at them is that they cause the people that get the pay day loans to become dependent on them. Because they realize they can get out of a jam so easily by just paying some additional money, people tend to be even less financially responsible, putting themselves into even worse situations and wasting a lot of money in the process by needing further pay day loans to get out of them. In the situations, that's the edge that says requiring people to get payday loans tend to be ones that the person could have easily avoided, and likely should have learned from. If someone is simply spending more than they are in, for example, the lesson would clearly here be that they need to learn how to crack down on their expenses and pay less. If they do not do this, however, that they are only going to encounter trouble again in the future, and things will only get worse as the debt of their financial mismanagement only grows larger overtime. Someone really could lose thousands upon thousands of dollars in this way if they have to rely on pay day loans to make up for their own lack of self-control.
In a situation like this, however, the fault of that is clearly not on the payday loan officer. You can clearly say that the payday loan officer should have told them that they would not like to give them another loan and that the fee will only grow higher the more they do it, but that is exactly what they do! They actively try to discourage people from taking out frequent payday loans like this because, like everyone else, the people giving out the loads care about those receiving them. In situations like this, the payday loan people become the only life I met someone has, however, which place is the locus of the problem far outside the loan officer themselves. It is somewhat like someone being a drug attic, only with financial mismanagement and their life being a lot more expensive than it probably should be.
One way the pay day loans try to get around this, however, is by limiting the amount that they will give out to be very small. Most of them do not even go over $1000, if that would be a relatively large one. For that reason, how much you are charged interest also changes, in the favor of the payday loan officer of their image. On $1000 loan, you're probably never going to be paying more than something along the lines of $100. Maybe $200 at most. Although that is a large fee relative to the size of the lawn, existentially, that is not a very large for you to help get you out of a jam if you have no one else to turn to! In this way, payday loans would use correctly are actually quite fair, and the vital part of most peoples livelihoods when they get into a bad situation.
How Do Car Title Loans and Payday Loans Differ?
I've been gone over in depth now what goes into a payday loan, the many complications of it, and the general discourse on it, you may be wondering how car titles and title loans play into that. This is a lot simpler than you would think, but also has a little bit more to it than you would expect from a simple pay day loan. Although they tend to go hand-in-hand, one is definitely different than the other, and based on the name, you can definitely predict some of those differences!
One of the main differences between a normal pay day loan and a title loan, which is a kin to a car title loan, is that there is collateral put forth for the loan itself. If you own a vehicle, you technically in the legal sense on the title to that vehicle. It is your car, and yours alone! At least as far as the government is concerned. Your family may differ, and your friends may borrow it, but legally, it is yours. When you're going to get a car title loan, however, this is where this comes in handy, as that is the main thing that comes into play when securing the loan.
While a payday loan is one that is only required to prove that you have a source of income, a car title loan as one where, although they may indeed conduct a background check to you, they mostly care about whether or not you have a car. This car is basically put up as collateral, rather than having a very thorough inspection of whether or not you can realistically pay the loan on time. You are in a sense loading your car in exchange for some money, as if you did end up crapping out on the loan and becoming on able to pay, the one that you are giving the loan to quite literally gets to take your car!
As you might expect, cars are worth a lot of money, so these car title loans tend to be for much higher something you would find of the higher paying variety. This does not mean that they are used for anything different than a payday loan, mainly the amounts being different. This tends to be on the order of magnitude of tens of thousands of dollars, which coincidentally, is right around the price of a car loan. The car itself is what you are giving up if you tend to not pay your bills, and if you ever did decide to default on the loan itself by never paying it off, or giving up, they on your car! It would be really great if you could do this for your children, giving one of them up for collateral if they act up or misbehave, but right now we are limited to things like car titles and home titles.
This is the main downside of a car title loan, but also the source of its power. Whereas on a payday loan if you fail to pay it back then you can have legal ramifications come your way and the interest rate raise, if you try to default on a car title loan, then you will quite literally lose an entire car. You will definitely not get more money than your car is worth, but you will in a sense be losing out on money because the amount of loans that you get on the car title loan tend to be well below the actual price of the car. This gives the one loaning you the money a lot of incentive to give it to you, as they will instantly be getting a lot in return should you decide to in anyway shape or form neglect your side of the agreement.
More Loan Myths
As you might expect, this type of loan, much like pay day loans, has many myths surrounding you that give it a very bad reputation. One of the worst reputations that this type of loan has in comparison to payday loans is that it is one said to be sought by people that have burnt out on payday loans and can longer get them. They have simply used up that resource, or financially responsible, and all they really have left is their house and their car. In Lou of boating down their house, they put down their car in exchange for a quick money to use on any number of things.
As we will soon see you, however, this is somewhat of an exaggeration, much like saying that everyone on welfare is mooching off of the system. There are many legitimate reasons to get a car title loan, especially if you are in times of need. Many people that go for car title loans are ones that have never even had a pay day loan at all. They simply need a very large sum of money that a payday loan cannot provide, they either have no credit card or not enough on their credit card to be able to afford it, and really have nowhere else to turn to.
As you can logically see from this very simple example that probably is occurring right now all of the world, there really aren't that many options for people if they need money of that kind in that high of an amount. You simply cannot get that quick of a return on any kind of cash in a matter what you do. Even if your friends and family are fairly well off of want to help out, coming up with something on the order of $10-$20,000 in an instant is a very trying thing to do, and not something many people will rightly be willing to do for one another.
In very dire situations like this, when you would rather not put all of your social relationships at risk, do not want to put a strain on your family, and absolutely have to have cash in a hurry, car title loans can be a very wonderful experience and something that you need at a hard part of your life. They do not require any kind of credit checks or history to be looked into, as the car title itself as well as put down as collateral. You could have the best or worst credit in the world, but as long as you have a car, that is worth a lot more in this particular situation! And the grand majority of people do on cars, making this a very easy thing to get into for most people.
The interest rates on something like this are going to be fairly high, as you might expect of all quick loans of this kind. These tend to be given out in less than 15 minutes, and if you have a very small loan that you need, such as an amount that is far less than $1000, they might even forgo the entire interview process for the sake of just putting your title up for collateral. This higher interest rate is of course the fee for being able to get such a large sum of money on the spot, and is entirely necessary to be charged because otherwise the system simply wouldn't work!
Laws and the History of These Loans
Although loads of this kind of been around for a while, they are relatively recent in the history of loans itself. For that reason, many people are not experience with them, and Mani do not even know that they exist. They started off in the 1990s, and have only got have more prominent since then. There is a huge risk to them of course and that you could lose your car, but relatively to the amount of money that you need, this is entirely fair. There are plenty of times as we have gone over where are you simply need a lot of money in the short span of time, and aside from putting up your house and risking being homeless, you at the very least could survive losing your car if you ended up not being able to pay the money back.
The fact that people that give out car title loans are willing to give out far larger amounts is entirely because they will instantly have your car under their legal possession from the moment you walk out of the building. That is not to say that they are going to do anything bad with it, or that it is instantly going to be theirs. It is simply going to be there is if you decide that you cannot pay the money back, or forever reason try to get out of paying the money back at all.
Some people are used to talking about these sort of loans as auto pawns, or a car title pawn. These are both technically very similar, and have a very similar process that goes on whenever you receive it. For the purposes of our discussion, however, it is officially called a car title loan, and that is how we will be referring to it here. Because it actually is a loan, and nothing like a pawn, we would prefer not to refer to it in that matter because it is relatively misleading.
Much like a payday loan, you will need to go into the car title office with more than just your car and the title of course. You have to have a valid or government issued ID of course, usually being a drivers license if you have the title to a car, be able to prove that you are employed and have a source of income, need to have some mail from your address to prove that you're actually a resident somewhere or not someone barely passing through, being able to carry your car registration with you so they will be able to take a look at it, have references the prove you are a good standing, and of course needing car insurance, although in many cases being able to prove you have insurance really is not necessary. After all, if you want to car, even if it is not insured, it is still yours to give away!
When you have to make each payment on the loan is a very different thing depending on the circumstances in the amount that you take out. Making more frequent payments is obviously preferred, and it would be very rare if you did not begin making payments at some point at least on a monthly basis. Otherwise, the amount of money owed can grow to large, which is a very hard thing for most people to manage, even if they are very good with their money. For people like this, one of the loan officers will be able to walk you through the whole thing, making it all a very relatively easy experience for you to understand even if you do not know what a loan really is!
The interest here are relatively high compared to what you are used to seeing on the APR of a credit card, but if you are coming to someone for something like a payday loan or a car title loan, the chances are that is not an option that you have available to you. Sometimes they can be over 100%, depending on the terms, the car, and the repayment schedule. This can vary just as much as the circumstances requiring people to take our car title loans, so there really is no standard procedure when it comes to this. You can expect a lower interest rate if you have a very reasonable chance of paying the money back in a timely manner, and they hire one if they have reason to believe that you might have trouble. You will still be getting the money either way, usually by the time you walk out of The building or get done with filling out the forms on the website for it to be reviewed.
If you end up not being able to pay the loan back by the end of the designated term of the loan, you may have to pay it all back all at once then, and if you can't, you may need to roll out the lawn and take out a new one. There are regulations in place to prevent you from doing this too many times, however, so even if you did squander your financial live in complete miss management for a long period of time, there was really only so much damage you can do by law. They are looking out for you and that way, although most people that take out these kinds of walls do not encounter trouble of that kind.
Most of the stories of people that take out car title loans are actually very boring, which is why you will never hear about them. Someone simply need of a lot of money to pray for a procedure, wanted a bunch of cash to put a down payment down on the house that was a really good deal it was about to evaporator, and all kinds of other things that we tend not to be able to do if we do not have a lot of money saved up. They go to a car title loan office and fill out the paperwork. Afterwords, they are given the money, and use it for exactly as intended. At the end of the loan period for it, they have paid all the money back with the agreed-upon interest. It is very simple, and there really is not a whole lot to it!
What Happens if You Do Default?
Well if you default on the loan, or another way is cannot pay back the loan, things then proceed from there as if the one you gave the loan to actually on your car. Usually in this case, if it is a nice car, they may actually want to! In such a case, they will likely try to have the car taken from you because it is legally there's. They will then sell the car if they have nowhere to put it, or it somewhere find out what to do with it in a way that pleases them. This usually results in a loss of money for them, as they only do that to offset the cost of losing out on the money that you will not repay them. They would far prefer that you paid back their loan, as would you, which is the more typical case.
By law, however, you don't have to worry about your car disappearing immediately if you decide or in anyway are subjected to not being able to pay your loan back. Required by law is a period of at least 30 days that will give you time to pay off the remaining balance. If you can do it within that time, the car can still be yours, and you will not have to worry about anything going poorly. If for whatever reason that you can't, however, then the car isn't even lost, and you are all out of chances!
Because of the advent of the Internet, you can also go through most of the process online without having to do anything at all. You can access everything on the Internet, and be approved for the loans themselves or preapproved because all you really need to do is on a car! You can then visit somewhere to get the money, or otherwise make arrangements with the loan officer for how you should receive it. The most typical case is someone going in person to receive a check, because chances are you need the money in a hurry, and that is the quickest way. The quickest way outside of receiving a giant briefcase full of money, however, which is a little less prudent, and harder to explain to passersby!
Much like a payday loan, there are limitations on how much money you can take out. You will be able to take out a far larger something if you simply got a pay day long, but there is still a very solid ceiling care for how much money they're willing to give you. The amount that they are willing to give you is entirely based on the total value of your car if they had to sell it at auction in a hurry. Although this can be difficult to determine in some situations, in reality, cars are sold at auction all the time, and it's not all that hard to look up the history of it to figure it out. If you have a specialty car, this can take some negotiating because those items may go for more or less than anticipated, but in most cases, this is a fairly easy calculation to make.
How Much Money is Involved?
Giving out car title loans is indeed a business, and accordingly, they need to profit from it. For that reason, the amount of money they're willing to give you tends to range between 30% all the way up to 50% of whatever they deem your car to be worth if they were to sell it in a hurry. This is the most money you will be able to get when walking out of the loan office, and no amount of negotiating is really going to help you there. Unless you have some super sort of specialty car that you are trying to convince them is worth more money, that's about as much as you can expect to get out of a car title loan, so you should go into the situation only seeking an amount if that works out for you.
If you happen to need more money than that car title loan will allow you, there are some ways to get around that, although they involve a longer period of time. One way of doing that is simply to take out multiple car title loans. If you take out one car title loan, pay it off, and then take out another one immediately after, most car title loan lenders will be perfectly happy to do that because they have already been shown to pay the loan back in a timely manner. They will directly profit from it, and have no reason to turn it down! It is a win-win situation for both you and those giving you the car title loan.
There are also other ways to get around the limitations of the value of a single car, and ones that are mathematically obvious. If you happen to have more than one car, or a part of a household that has multiple cars, each of you can take out a separate car title loan on the value of those cars. The average home has at least two cars, which are worth on average about $20,000 at the very least if they were sold at auction in a hurry. That is already $20,000 worth of loans right there that you can potentially get, with a healthy interest rate tacked onto them in your repayment of coarse, but it is a lot of money without a moments notice nonetheless!
Most people that take out loans of this kind are actually very average people that you will see every day, and you probably already know someone that has taken out a car title loan before. Although everyone that takes out loans in general has a reputation for being poor, people that take out car title loans on average are actually fairly well-off! Their income tends to average between $50,000 and $75,000 for their household. That was actually pretty good in most areas, especially if you are not living in a very expensive city! We mentioned this to further do away with the myth the car title loans are for people that are poor, waste of their money, and sit with you another lending hand to help them mismanage it.
Plenty of People Get These Loans, They Just Don't Talk About It, Like All Loans
The reality of the situation is that people taking out car title loans are people just like you, no matter who you are when you read an article like this. All of us get into hard times, and come upon certain situations that require us to get a lot of money. We don't always have the luxury of time on our side, and as you might expect, not many of us have many people to turn to that can give us $20-$50,000 in a hurry! That is the average person if you could describe them in anyway at all, and it something that could happen to all of us. Car title loans are a wonderful way to get ourselves out of that situation, as the consequences of not doing that can usually be far worse.
Judging these sort of loans by the higher interest rates are also entirely unwarranted, because you are essentially paying for a service, not getting a traditional loan. These APR rates are only higher when compared to things like credit cards and mortgages. Those are entirely different situations, however, and very much not a service that you are applying for in any meaningful sense. They are commodities in most ways, and tend to be about the same between people. With a payday loan or a car title loan, however, you're quite literally paying for the convenience of getting everything immediately exactly when you need it.
As you might expect, that means that you really cannot compare them as far as the interest rate goes to any other type of loan. They are entirely unlike the other type of laws that you might see, and for entirely different purposes. No loan on the planet aside from these will give you money that quickly, and that is entirely their purpose. It is a fee that you are essentially paying, it is just wrapped up in the terms of a loan for legal purposes. You are paying extra overtime to get more money now. That really is all there is to it, and when viewed in that way, it really is a lot easier to see why they are so valuable!
The criticism that is leveled at car title loans which is not given to pay day loans is that they are somehow meant to trap those that signed up for them. There are many myths as to how this occurs, but many of them revolve around the fact that people that get car title loans are given very unclear terms, do not understand how any of it works, and the schedule of payment is made confusing. There are also other amusing things that people to send to say about them, but the gist of them all about to the fact that they are laws designed to be never repaired so that people can take your car!
As you might imagine, that is not a very profitable business model, and it would only last so long before absolutely every car title loan and pay their loan place went under. If this were the case, there would be no one giving out loans of this kind, because he would only be able to do it a handful of times before people caught on and stop coming to you. The authorities would also shut you down, and then any number of ways, this entire practice would not exist. Seeing as how it does exist, it is a very thriving business, all of these things are patently false, and none of them really have any bearing on your decision to pursue a car title loan or a pay day loan.
The Law Here Protects You Both
In Texas itself, there are many laws that have been passed ball to protect those giving the loans and to protect those receiving them. The Texas Fair Lending Alliance makes it out to be a very set practice that will prevent people from falling into a trap that has become so common there. Many people in Texas that we're receiving pay day loans before 2001, for example, we take them out within two weeks of each other to fill spaces in their financial management that needed to be continually done. In situations like this, it would be increasingly hard for families to pay the loans back, although they clearly benefited from those loans so they would not be taking so many of them out! To help make things easier in the sense on the people that may have a chance of defaulting on their loans, Texas itself has The interest rates on all car title loans and payday loans. There is really no way to get around this, so you know it is fair!
Although car title loans have been banned and 25 states, you can definitely do it in Texas because that is not one of them! This is probably because Texas has laws in place to protect both consumers and providers of car title loans. These keep everyone on the same page, gets rid of some of the pitfalls that can occur when seeking out something like a payday loan or a car title loan, and in many cases just make it safer overall for everyone involved. In other states, or at least half of the other states, this is not true. In Texas, however, it is fairly safe to take out a car title loans!
If you can pay your loan back on time in a timely manner, the amount of interest that you are charged is actually relatively low. In some cases you might even be able to pay less than 25% if you can do it within a month. This tends to be more common than people give it credit for, instead focusing on the tragic situations that, much like someone that abuses a credit card, gets them in the trouble. Here, however, you can expect to see many people taking out loans and paying them back in a completely reasonable matter that is very manageable for them.
Defaulted Balances Do Compound
If you continually rollover your loan balance, however, you can expect that level of interest to pounds. In the above example, we use 25% as the interest rate to be paid on a car title loan that was due within one month. If you were to roll that amount over for the course of an entire year, however, you can expect the math to make the compounded interest rate to be around 300%. To be sure, that is an astronomically high number! You would need to decide yourself whether or not it was worth it to have the money in a timely manner, however, and on top of that, be more realistic on your ability to pay it back. If you actually did pay it back within the specified timeframe, like a responsible adult, that you really would have nothing to worry about.
The structure of loans here is also safer in Texas, thanks again to those laws. In other places like Missouri and Virginia, things can be a little different. There, various restructuring and word games have allowed people to make things that are very similar to car title loans, but essentially have a potential for unlimited amounts of interest being charged on the loan. As you might imagine, this is absolutely ridiculous! No one could afford or would want to take out a loan where the interest rate was entirely indeterminate, and would only continue to rise over time in a way that made no sense.
Car title loans in the state of Texas, however, do not have to deal with anything of this kind. They are entirely safe, easy to get access to, and good for everyone involved. You will not have to worry about anything bad happening while under the process of getting a car title loan, and you are more than welcome to use it for anything that you please while having the interest rate be fair, understandable, it's something that you can pay back.
Few People Default
If you wanted to see the odds of you actually losing your car, it is probably useful to look at some statistics on how many people actually pay back their car title loans. Nationally, 20% of people defaults on the loan, resulting in them losing their car. Compared to other forms of loans, however, this is actually pretty good! If anything, it is a comment on how financially responsible people with car title loans can actually be. If you were to look at the state of Texas in particular, the rate of success is actually far higher, which we would estimate add around only 10% of less of people defaulting on their loan and losing the title to their car.
If you were to compare this to things such as student loans and mortgages, you would actually be doing fairly well! Car title loans and people that sick them tend to be more responsible in Texas itself, thanks in no small part to the laws passed to make everything fair and safe.
Summing It All Up
To sum all of this up for those that have been reading along so far, or simply skip to the bottom, we will briefly go over what payday loans and car title loans are, and why you might want them. They are very similar, but different and very obvious ways, mainly changing based on the amount that you need.
A payday loan is a very short term loan that is paid back within the span of one month and for a very small amount, usually well under $1000. You're given the money interest there, you do not have to have credit at all to do it, and write them a check on the spot to pay it back on a particular date with interest. A car title loan operate similarly, instead of being a higher amount on your car, also typically repaired within a month. If not longer, based on the terms.
Both of these things have a large number of myth surrounding them they have given them a bad reputation. All of these are entirely unwarranted, however, as we have gone over multiple occasions. If you need a lot of money, you need it right now, and you have either a job or a car, both of these are very suitable options if it will get you out of the gym. You should do your best to manage your finances better tonight need things like this, but that is also like saying that we would all be better off if we lost 20 pounds and gained 40 pounds of muscle. In the real world, sometimes we need some help, and here, we are happy to do it!
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