Car Title Loans in Port Orange: What to Know Before Applying
For those who are cash strapped and in need of financial relief, a car title loan may be the answer to your financial woes.
With Port Orange title loans, you can get quick cash for your emergency needs, and the loan process is practically hassle-free!
This article will give you a rundown of the important things to note before applying for a title loan.
If you’re considering getting a title loan, it’s important to understand the jargon commonly used in the loan process. This way, you’ll be able to find the best title loans suitable for YOUR needs.
What Are Car Title Loans?
Car title loans go by many names, auto title loans, vehicle title loans — they all pertain to the same thing.
A car title loan is a form of secured loan where a borrower offers the title to his or her vehicle as collateral.
It’s a short-term loan wherein the title loan company places a lien on the borrower’s title in exchange for the loan amount. When the loan is paid in full, the lien is removed, and the car title is returned to the borrower.
In effect, you borrow money based on your car’s equity. To determine how much money you can borrow and at what interest rate, the lender will consider things like the market value of your car and your income.
Definition of Terms Used in Car Title Loans in Port Orange
An auto title loan is an alternative to bank loans, pink slip loans, and credit union loans.
Applying for Port Orange, Florida title loans is such an easy process that it has become a popular source of funds for unexpected situations like medical bills, house renovation, tuition fees, etc.
To give you an idea of how a title loan works in Port Orange, let’s define the terms for better understanding:
This is a loan that is protected by collateral. A borrower is required by the lender to provide an asset as a form of insurance in case of loan default.
In this case, the vehicle acts as the collateral. It is important to note that when the loan is not repaid in accordance with the terms of the loan, the lender can seize the collateral to regain its loss.
In order to be secure, the collateral must be worth more than the loan amount.
Short-term loans, such as Port Orange title loans, usually last 15- 30 days but can be extended, depending on the lender.
Some auto title loans are single-payment loans, wherein the borrower has to pay the full amount of the loan plus the interest rate within a period of one month.
But there is also the installment type of loan, which can be paid back over three or six months. The loan term must be discussed in detail with the lender before the loan agreement is signed.
This is a legal claim against a property to secure payment for the loan. This means that when you surrender the car title during the loan term, the lender has a legal right to the vehicle.
IMPORTANT NOTE: The good thing about Port Orange title loans is that the physical vehicle remains in your custody. You can continue using the vehicle because only the title is turned over as collateral.
Annual Percentage Rate
APR is the amount of interest and other costs (such as fees) that you pay to borrow money.
It is expressed as an annual rate. The APR represents the total annual cost of borrowing money.
How Do Title Loans Work?
To apply for a car title loan, borrowers simply need to fill up an application and submit requirements.
You can receive approval fast because the loan documents are straightforward.
Unlike bigger financial institutions that offer personal loans like banks and credit institutions, Port Orange title loans are SIMPLE.
Most lenders will need to verify the identity of the borrower, ensure residency in Port Orange, FL, and check the general condition of the vehicle (the title and the vehicle must have matching VIN numbers, and evaluate your ability to pay for the loan).
The loan application can be done at the storefront, or you may opt to apply online.
In this section, we will enumerate the requirements of most lenders in Port Orange, FL.
*Please bear in mind that these requirements and documentation may vary according to the state regulations.
#1 Car Title
As the name implies, a primary requirement of a Port Orange title loan is a title REGISTERED in your name (as the borrower). More importantly, the title must be free from any lien.
The vehicle can be a car, van, SUV, and RV. Some lenders in Port Orange may even consider a motorcycle!
The car must be in good running condition to be accepted as collateral. Factors such as the make, model, mileage and general condition of the car will be considered when determining the loan amount.
Some lenders require a physical inspection to give a fair assessment of the car’s equity.
In some cases, though, pictures of the vehicle from all sides (front, back, left, and right), including the odometer, engine, and interior of the car, are already sufficient.
The VIN number in the car must be the same as the one printed in the car title, too.
TAKE NOTE: VIN number is the car’s identification number normally found below the windshield of the driver’s side, engine bay, or door sill. It gives you the make, model, year, and original color of the vehicle when it was made by the manufacturer. VIN is different from the chassis number.
#3 Government-Issued ID
To apply for title loans in Port Orange, you need to provide personal information, and presenting a government-issued ID is a way for the lender to verify your identity.
Acceptable government-issued IDs include the following:
- Driver’s License
- Social Security ID
- State License
Make sure that your IDs are updated and current. A lender will not accept expired licenses and passports.
#4 Regular Income
Presentation of proof of income is an important requirement in Port Orange title loans. This can be in the form of pay slip from your employer or financial documents if you are an entrepreneur or freelancer.
Pensions, alimony, trust fund, annuities, investments, and other sources of money can also be shown as proof of income.
For Port Orange car title loans, you don’t have to be employed to apply.
The important thing is that you can show how much money you have on a regular basis and prove that you have the CAPACITY to pay the loan.
- Personal References – In some cases, the lender may require you to provide personal references to check your background further. Choose at least three people (can be from your workplace, neighborhood, mentors, and associates) who are NOT related to you.
- Bank Account – Most lenders in the state of Florida require an active bank account. This is also for the sake of convenience so that the lender directly deposits the money in the bank. This way, you get your money fast without having to leave your home to fall in line and pick up the cash.
- Insurance – Some lenders may require full car coverage, especially if the loan is $5000 or up. Though this is not a basic requirement, this might be a useful bit of information if you are planning to take out a big loan.
Benefits of Car Title Loans
#1 Easy Loan Application Process
Because of the lack of credit checks and other paperwork, processing an auto title loan takes much less time than a traditional loan from a bank.
#2 You Get Your Cash Fast!
If all the requirements are in order, some title loans allow you to get the amount you need within the same business day.
If you are in dire need of cash for emergency purposes, this will certainly suit its purpose.
#3 The Vehicle Stays With You
This means you get to use your car during the loan period. Only the car title is surrendered to the borrower.
No inconvenience on your part, as the borrower!
Frequently Asked Questions
If this is the first time you’re hearing about car title loans, it’s simply because it’s relatively new in the financial market.
It was in the 1990s when car title loans first emerged as an alternative to traditional lending institutions.
There was an untapped market of individuals who could pay loans, but due to their previous credit score ratings, they were deemed unqualified.
Since then, title loans have gained traction because of the convenience and easy application process!
Are Car Title Loans for Me?
To best answer this question, we’ll tell you what sets title loans apart from other traditional loan channels in Port Orange, Florida:
- The loan proceeds can be used for almost anything that requires immediate payments, such as medical bills, school expenses, house repairs, appliance purchases, etc.
- Credit score is not a primary concern when evaluating the loan application. You can still get approved, even with bad credit.
- You get the cash fast. Although it is not considered a pre-approved loan, you can get the money from the lender on the same day.
How Much Money Can I Borrow in a Port Orange, FL Title Loan?
The loan amount is primarily based on the vehicle’s value rather than the typical credit check.
The better condition your car is in, the higher the value of the loan.
What Is the Interest Rate Used in Title Loans?
The rate varies per lender.
For consumer protection, the state has regulated this loan method and put a ceiling on interest rates.
Under the Florida Title Loan Act, the lender can charge a maximum interest rate of 30% per annum computed on the first $2,000 of the principal amount.
In excess of $ 2,000- $3000, it will be 24% per annum. It will be 18% per annum on the part of the principal amount exceeding $ 3,000.
How Do I Know the Value of My Car?
There are several factors that affect the car’s equity.
The make, model, and mileage of the vehicle play a crucial role in the valuation.
How much money you can borrow is affected by the general condition of your car.
What Is the Difference Between Car Title Loans and Payday Loans?
Car title loans are often compared to other short-term financing loans like personal loans and payday loans.
Port Orange title loans are an example of a personal loan. The more obvious difference from a payday loan is the repayment of a payday loan is timed to coincide with a borrower’s payday.
A car title loan is due in about a month regardless of the borrower’s pay frequency. In a car title loan, employment is not a prerequisite as long as the borrower has a steady stream of funds.
In addition, instead of authorizing the lender to withdraw payments from a bank account, the borrower surrenders the car title to the lending company.
The vehicle’s value is the primary consideration for the amount that can be borrowed.
Common Fears About Car Title Loans
Let’s address the elephant in the room.
Some people are wary of title loans because of the notion that it protects the lender more than the borrower.
One thing is sure: If it is state-regulated, then borrowers are equally protected!
#1 Credit Check
Are you burdened with a bad credit history?
The good news is, to qualify for a title loan in Port Orange, FL, the primary requirement is a vehicle registered in your name.
A low credit score will not be an obstacle in the credit decisions of many lenders in Port Orange.
TAKE NOTE: The lender MAY or MAY NOT pull up your record to do a background check on your credit history.
The important thing to emphasize is that your loan will be based on the current market value of your vehicle, not your credit score.
So even if you’re worried about your debt or have poor credit, you can still qualify for a loan!
If you default on the loan and cannot make monthly payments according to the loan terms, the lender can seize the vehicle.
Yes, repossession is possible in car title loans in Port Orange, FL.
The rules of repossession are different from state to state. Some states give the borrower an extra 30 days, while other states may not.
If you’re seriously considering taking out a loan, check the rules of repossession, particularly to Volusia County and other parts of Port Orange.
For your own protection, be mindful also of prohibited practices from lenders.
Before you scratch off Port Orange car title loans because of this risk, remember that repossession will only happen in case of loan default.
There are remedies that you can do before it reaches this extreme scenario.
Our advice is to shop around for flexible and willing lenders to work out payment terms that suit your budget.
Making payments must be a priority in your budget!
#3 High Interest Rates
Short-term loans, such as a title loan, are perceived to have higher interest rates than bank rates.
The interest varies from lender to lender and state to state. It can range from 25% a month to 300% annually.
Luckily, the Florida Title Loan Act set a cap on interest rates.
Auto title loan interest rates are typically expressed annually. As defined earlier, the APR (annual percentage rate) represents the total annual cost of borrowing money.
Besides interest rates, lenders generally add origination fees, document fees, and processing fees into the repayment amount.
In some cases, there may even be penalties imposed on the borrowers, such as pre-payment penalties and late payment fees.
Before applying for a title loan, be sure to discuss all the hidden fees involved.
Look for a lender that offers reasonable interest rates. When it comes to loans, speed reading is definitely a no-no. Read the fine print to avoid unnecessary extra fees.
#4 GPS Tracker
As an additional precaution, some lenders install a GPS tracker on the car. The borrower has 100% access to the car and can still use it at the same time as the monthly payments are being made.
It is the lender’s way to keep track of the vehicle.
If you are not comfortable with being tracked, keep this requirement in mind when choosing the right lender for you.
Not all lenders have this particular requirement anyway.
How to Find the Best Car Title Loan Lenders
1. Customer Experience
Read up on the feedback from other customers.
On some lending company’s websites, you can view the comments and make inferences about the whole customer experience.
2. Track Record
Check out the lending company’s track record. In this age of digitalization, where everything is easily accessed online, it would be easy to know the reputation of the lender.
Have they been in the business long? Are they compliant with the state’s regulations?
After all, you will be surrendering your car title to them. A few clicks won’t be bothersome. But be sure to use reputable sources and stay away from fake news!
3. Compare the Rates & Stay Updated
It’s a competitive world out there. You can stretch your hard-earned cash if you take time to compare the rates being offered by lenders.
Title loan laws also change periodically, therefore it is important to visit your state’s legislative website from time to time.
This way, you are aware of lending practices that may be unfavorable to you as the borrower.
For those in a financial bind, consider getting a car title loan. It is a quick and convenient way to borrow money.
You can apply online or at the storefront! How much cash you can loan depends on the current market value of your car.
Before you apply for a loan, you should carefully evaluate your options. Title loans are suited for unexpected expenses.
If you’re thinking about using the money for something that can wait, it’s probably better to wait (until you get other sources of funds with a more reasonable interest).
Once you’ve made up your mind and decided to apply for a loan, read the terms of your loan agreement carefully.
Unplanned expenses tend to knock us off balance, so it’s best to be aware of car title loans as a viable option.