Car title loans are one of the easiest ways to get the money you need when you’re in a pinch. Title loans let borrowers use their car as collateral so they can get cash fast. Many borrowers have their loan money in hand in as little as 24 hours. All it takes is a clean car title to get it.
What is a clean car title? A car title is considered clean when there are no liens against the vehicle. As long as there are no liens against the car, the vehicle may be eligible to be used in a car title loan.
When a borrower gets a title loan, they put the car’s title papers up as security. The lender hangs onto those papers in order to make sure the borrower has an interest in repaying the loan. Once the loan has been paid with all applicable fees and interest, the title is returned directly to the vehicle owner without hesitation.
Title loans are speedy, and they aren’t quite like a bank loan. Instead, they are short-term loans that are designed to help borrower get cash when they need it most. They are also designed to be repaid in a shorter period of time, generally about one to three months.
Title Loan Legislation in Alabama
Short-term loans have a different interest structure than long-term loans. It’s usually incredibly competitive, but a bit higher than something you would see on a bank loan because the loan lasts for a shorter period of time. This means that borrowers are generally paying less interest in terms of dollar value.
In order to keep interest fair for both borrowers and lenders, the State of Alabama has some regulations regarding interest in the short-term loan industry. Lenders have to be compliant with this regulation, as well as any local statutes and the Alabama Pawn Shop Act.
- With regards to title lenders, the Alabama Pawn Shop Act specifically states that:
- All lenders must be licensed with the state
- All lenders must provide a written agreement stating:
- The borrower is the original owner of the vehicle
- The terms under which the borrower may reclaim their vehicle
- A lender cannot operate with a suspended or revoked license
Title lending is a legal and helpful form of lending, and any lender that does not follow these state regulations does not have the borrower’s best interest at heart. To report a company you believe is abusing your rights as a borrower immediately contact the Consumer Financial Protection Bureau.
You may also want to file a report with your local law enforcement office in order to prompt or facilitate any local action or investigation, as well as to protect your rights and assets.
Chief of Police for Mobile: James Barber
Non-Emergency Phone Number for the Mobile Police Department: (251) 208-7211
For help understanding Alabama state regulations in the title loan industry, all you have to do is give our office a call. Our team has years of experience with Alabama title loans, and we know not just what the regulations are but why they matter. We are happy to work with you to develop a better understanding of title loans to make you feel more comfortable and confident about the lending process. We can also set you up with a Mobile lender that provides trustworthy, state compliant loans so you won’t have to worry about the legal stuff, freeing you up to take care of those pressing financial matters. You can get started with our online application or on the phone and get a title loan you can trust when you need it most.