Author: Harold Robinson

Florida may be out of a recession, but it always seems that people are tight on cash. When this happens they will look for ways to get cash for short term financial needs. We all know about payday loans and instant cash advances but those are tough because the rates are high and you often can’t borrow much. Qualified residents can get a hold of the extra money in a short amount of time. Using your car’s collateral is a great way to get emergency financing. Consider this option if you have bad credit or don’t want to deal with a bank or installment loan company. However, there are stories about people borrowing a large sum with hopes of paying it off in weeks. Only later do they realize that they owe more in finance charges than the principal itself. People ask how a financial arrangement like this can be legal. But it does happen and one can avoid such situations if he chooses a company and pays the equity loan on time. One of the main culprits of high fees for Florida online lenders is the rolling fees.

Florida Title Loan Rates – What To Expect From Your Lender

Financial service companies charge a high rate on the principal borrowed. Consider the APR for this loan, it would be somewhere in the range of 100%. In some extreme cases, some Miami title loan companies will charge rates as high as 200%. In this situation, the payback period is calculated by days rather than weeks. An online lender that provides $100 requires a payment of $115 on payday. If the borrower misses the payment, it will be rolled over to the next payment date and the next payment will then be $130. If this sequence is repeated for four pay periods, the borrower owes a total of $60 in finance charges, which’s a full 60% of the principal. When a full seven pay periods is rolled over, the finance fees will be more than the original amount of money borrowed. This is one situation where it should be avoided at all costs. We know regulations in Florida should stop fees and interest from rolling over. However, they don’t always apply to borrowers who seek out car title loans. Also, there are local lenders in cities like Fort Myers, Miami, and Orlando that attempt to skirt licensing restrictions. For example, Miami requires some businesses to obtain a permit or business license before they operate in the city. Check your city and county requirements before signing a contract.

One simple way to avoid this situation is to research the rates before even taking out a cash loan. Many borrowers need cash for an emergency. They look past the situation and understand it’s a short term request. Some applicants take out a title loan without comparing rates between each online lender. Many times they go with a higher rate loan with a title lender who promises them more money upfront. A Borrower should spend a couple of hours online understanding the payment structure. Search for better first-time deals online before taking out vehicle equity financing. Work with a title loan company in Florida that provides the best rates and fee disclosures before you sign up. We know by doing this they can lower or eliminate some fees.

Find a Title Loan Company That Has Low Fees and Finance Charges

The other obvious way to avoid a roll-over fee is to pay back the vehicle title loan on time. This is a simple and realistic way to avoid the rolling fees. Work with your local Florida company to deduct from the payoff itself. You can fix any tendency not to pay and make sure that it is a full repayment and not a partial monthly payment. Most cash advance firms will allow a partial payment, but this is nothing further from the truth. The next solution to emergency cash is to consider other sources of credit. Even though a credit card company charges a high interest rate, it is still lower than an installment or payday loan. Increasing your debt amount will impact your credit score and payment history. So, the same old rules apply here as with a car title loan. Make your monthly payments on time without fail. By doing this you don’t need to work with bad credit lenders when you need money.

Use a credit counseling service to help an individual plan your finances after paying off the loan in full. A credit counselor can help to point people towards sound financial services. Most reputable car title loan lenders will help you find a licensed firm that provides these services. Also, consider a title loan company that helps with payday loan reduction. They will work to improve your credit score and help set up a monthly budget. Our article explains the way to reduce the finance charges for title loans. You should not consider a title loan in Florida if the need is not critical. Instead, plan your finances and take control of your budget and expenses.

The laws and regulations on the books in Florida that govern car title loans are constantly changing. As with most lending products, these lending rules are different in most states and it’s not always easy to stay on top of recent updates. Because of that, we developed this site so consumers can be informed of short term lending changes in Florida. We also cover updates on the national level with the CFPB and Federal Trade Commission. Most borrowers aren’t always aware that even your city or local jurisdiction can enact regulations to control or limit vehicle title loans. Cities like Orlando and Miami have their own regulations in place that provide oversight on retail and online loans within their respective cities. With this article, we hope to give you a few tips on how to better understand the lending framework in Florida. Let’s get right to the details on what’s different with Florida regulations and other states.

A consumer should always investigate the laws that apply to their city and state. They need to make certain that they’re well-versed in the particulars of how these types of lending are regulated. Most regulations that cover title loans in Florida have been in place for years. In light of recent developments, there aren’t many changes on the horizon. These regulations will address how the loan can be paid back and what specific fees can be put in place. These terms also cover the finance charges and the amount of lending for which one is eligible. Most amounts are relative to the amount of the principal balance with an auto equity lender.

The most important updates related to how the regulators view short-term loans. Some payday lenders will allow their clients to refinance the loan for several periods. Situations like this occur if the borrower cannot afford to pay back the entire principal amount. Most often this needs to be paid back within one or two payment cycles. This allows the consumer to not end up spending yet another pay period strapped for cash. As they can pay the finance charge and, if possible, a part of the principal. The goal is to put off the full payment for a bit. This is convenient but can lead to problems with interest rates and fees only set to go up. California and Texas handle this arrangement in different ways when compared to Florida title lending finance statutes. Some borrowers choose to get out from under the lending obligation. A consumer can pay off the title loan online in full before the due date. Ensure your company has a policy in place that allows early payment with no prepayment penalty. Also, check and verify the finance lending license of any company you work with. You can do this at the State’s Title Loan License Verification page. You’re able to run a search in real time for any Florida title loan company.

It’s important to consider the number of times you can refinance an online short term loan in Florida. The reasons for why this is important are obvious. One wouldn’t want to plan their immediate financial future around bad lending advice. Some states allow car title loans to be refinanced quite a few times. Other states like Georgia and Mississippi only allow it to occur three times. This will play a significant part in getting one’s budget set up for the next few weeks after a payday or title loan online is taken out. Remember that defaulting on these online loans comes with huge consequences of an increase in finance charges and late fees. The fallout from default on a car title loan is even worse. You will still deal with the huge fees and interest rates. But most title loan lenders in Florida can repossess your vehicle after a few weeks of default. Based on this info, it’s best to find a local company for your budget and future situation.

Another major factor where regulations are concerned is the percentage of one’s established income they will be can borrow.  Some state regulations put restrictions on this when it comes time to calculate the payday loan terms. This means both consumers and service providers have legal protection but the cost is high. Be sure to read your contract terms before making plans for a car title loan. See how much one will be able to borrow so the budgeting is realistic and accurate. Don’t try to “trick” the lender into giving more than they should. Companies that give out no inspection title loans in Florida know the regulations that cover personal loans. A borrower who does this can put the lender and the borrower alike in a tough spot. Many of these loans are taken out online through a simple internet search. Compare that to a few years ago when you can go down any street in Florida and find a payday loan company. Payday advances taken out in this fashion are far more convenient than visiting a brick-and-mortar establishment. Most still will post the regulations that apply to the states in which the company does business. Not all lenders do business in every state. Florida and California have the largest section of short term lending companies. Be sure to check and make certain that any lender is allowed to provide their services in one’s state of residence.

While the title loan regulations in Florida for 2021 can seem a bit onerous, they do provide for the safety of consumers. They allow the finance company to operate under predictable and reliable terms. Borrowers have more options to compare their title loan options in FL. Many of these regulations are designed specifically to avoid over-borrowing and high fees. You can even count on new regulations and restrictions coming down in Miami and Orlando as we move towards 2021. The intention is to protect the consumer from getting themselves in over their head. The other goal is to prevent the lender from giving a consumer more money than they can handle. Car title loans are usually taken out for very small amounts, so most of these regulations don’t generally come into play. The consumer should be able to pay off the vehicle equity loan in a few weeks. In this case the title lender can verify the consumer’s income and financial capabilities.

There are a handful of reasons why big banks don’t offer Florida title loans. We get this question quite often here in Florida. Many applicants would prefer to get cash from their local bank and that’s understandable. Here in Miami, there are hundreds of established banks that provide emergency cash loans. The problem is that many of these lending institutions and credit unions aren’t going to provide car title loans. Let’s get right into the facts to determine why banks don’t offer auto title loans in Florida.

Do Banks Offer Car Title Loans in Florida

 

To start off as to why really a bank might not give you a car title loan, it is critical to understand what a secured and unsecured loan is. In the simplest possible way, a secured loan has a piece of collateral that the bank will seize in the event of a default. They have cheaper interest rates but are comparatively riskier. A standard bank loan does not have any collateral to protect it; so that would mean they would charge a penalty for not paying the loan in time. A car title loan is a secured loan while a personal loan is an unsecured one. As an unsecured loan does not take collateral into consideration, in the event of a default, lenders tend to use a borrower’s equity as security. In a general manner of speaking, an unsecured loan will be available to an individual who has a good credit history. But the absence of collateral also causes the bankers to charge higher interest rates, sometimes up to 300 percent. Most banks in Florida are regulated by the Florida Office of Financial Regulation. This means they must adhere to strict guidelines which regulate the types of loans they can provide.

These factors often cause banks to stick with unsecured personal loans rather than giving out car title loans. While they require more credit, they allow the bank to be comparatively more secure and also gain more monetary profits. Any licensed bank in Florida will not question the reason you require the money and also how you will spend it, this puts the onus on the borrowers, making it quite risky for them while more credible for the bank. They also have a ton of paperwork. However, if you are taking up a car title loan in Miami with your automobile as collateral, here are some factors you should be aware of.

A Credit Union Will Not Let You Use a Pink Slip as Collateral For A Title Loan

 

In comparison to unsecured loans, it is easier to obtain a secured loan as they are not so picky about great credit scores. This is because of the fact that there is collateral or a pink slip in place However, the possibility of default remains quite relevant which gives them more reason to avoid it. Second, the banks in Florida get to charge higher interest rates on the loans that they give out in case of a personal loan. Third, a bank has to follow way more complex regulations and background checks in comparison to that of auto title loan companies. In case your vehicle loses value due to any form of damage, it may then be tricky for the bank to cover it up. If you ever find yourself in a situation where you need emergency cash you should first check with your local and state government. Here in Florida, we know of many cities like Miami and Fort Lauderdale which provide hands-on budget help and workshops. You can also look into the free resources provided by the Florida Department of Financial Services.

The risk of losing your vehicle’s collateral can lead you towards a personal loan. You may not quite realize the possible implications of it in comparison to lenders that offer title loans in Florida. Despite the interest rates and credit scores, a borrower might want to go ahead with a personal loan. And banks might prefer it due to the credit factors involved in the whole process of giving out such a loan. Online title loans are basically for people who need cash fast. Most have bad credit, and have no Florida bank account or checking information. But they should take it only if they are confident of repaying before the due date or they might lose their car.