In times of medical emergencies, home renovation projects, or unexpected bills, title loans seem the fastest and most convenient way to get the cash you need.
Getting a title loan in Florida is simple. All you need to do is apply for the loan online, submit the necessary documents for a title loan, and in less than an hour, you’ll have the money in your account. However, before you apply for a credit, it pays to know the Florida title loan laws and regulations to ensure you have a positive experience.
Are Title Loans Legal in Florida?
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As stated in the Florida Title Loan Act, title loans are legal in Florida. The borrower uses the vehicle as collateral to apply for the loan. In addition, the borrower must provide:
- A government-issued ID
- Proof of residency
- Vehicle registration
- Proof of car insurance
- Proof of income
Title Loans in Florida: Basic Regulation
Because using your motor vehicle as collateral is allowable in Florida, there are basic regulations that prevent companies and lenders from misleading the borrower.
According to the Florida Title Loan Act, the lender should apply for a license through the Florida Office of Financial Regulation. Before receiving a loan, the lender and the borrower must sign a contract that covers all terms and rules, including the loan amount, repayment period, monthly rate, and interest rate.
Title Loan Interest Rate Caps in Florida
Florida state law permits the lender to charge an interest rate of up to:
- 30% per year for an amount equal to or less than $2,000
- 24% for an amount between $2,000-$3,000
- 18% for an amount above $3,000
Terms and Rates
According to Florida title loan laws, the minimum loan terms are seven days and the maximum loan terms are 31 days, with no limit on the amount a consumer can borrow.
At the end of the term, the lender will expect the borrower to pay the full amount, including the interest and the principal.
Contract for Florida Vehicle Loans
Once the lender approves the loan, it is time to sign the contract that includes the following essential information:
- Vehicle make and model
- Year of manufacture
- VIN (vehicle identification number)
- License plate number
- Vehicle mileage (if necessary)
The borrower must then provide:
- Personal information (name)
- Home address
- Date of birth
- Social Security number
The official contract between the lender and borrower should also include the date the loan was approved, the amount, and the maturation date of the loan. The interest rate must also appear on the agreement.
If everything is in order, the borrower can sign the agreement, and the lender will transfer the money in less than an hour. According to the Florida title loan laws and regulations, the borrower should stick to the agreement and make payments on time. If the borrower falls behind on the payments, the lender can repossess the car.
Car Repossession Laws in Florida
The worst scenario when applying for a title loan online is the inability to repay the amount. In this case, the lender has the right to start the repossession process. In other states, the lenders can send a repo man to confiscate the vehicle, but in Florida, things are different.
After the borrower refuses to pay off the loan or can’t come up with the money, the repossession process starts and:
- There is a 30-day period after the missed payment, during which the lender won’t repossess the vehicle.
- The lender should send a notice to the borrower saying that repossession is in process and that the borrower must turn in the vehicle on their own.
- The borrower may take their personal items from the vehicle before giving the car to the lender.
It is possible to avoid repossession by paying the amount you owe during the 30-day period. When the lender repossesses the car, they must send you an invoice at least ten days in advance that includes the amount you owe and when the car auction is scheduled to take place. The borrower can attend the auction and buy back the vehicle.
What You Need to Know About Title Loans in Florida
Besides the car repossession process, the official contract, and interest rate, many borrowers also want to know more about early repayment and partial payments.
In some states, lenders refuse to accept a partial payment and they have the right to charge the client a penalty for paying off the loan early. Florida is not one of those states. Florida law states that the lender can and should accept partial payments and avoid charging a penalty if the borrower wants to pay off the credit early.
Consumer Protection
The best way to protect yourself is to sign a contract with a lawyer by your side. If you think the lender isn’t following the state rules, it’s essential to get legal representation. In this case, the lender shouldn’t be adding any new terms and conditions to the agreement (other than the official ones).
Before signing, double-check the agreement with your lawyer to make sure the information is valid. Here is a directory of title loan places online where you can find responsible lenders.
What Happens After a Car Auction
If the amount of the car auction is less than what the borrower owes, the lender is not allowed to bill you for the remaining amount. If the car is sold for more than what the borrower owes, the lender has 30 days to transfer the surplus amount to your account.
A Final Word
Title loans should cover short-term emergency financial needs and be considered only as quick solutions for hospital bills or utility expenses. The state has established Florida title loan laws and regulations to protect the customers and their rights as follows:
- Florida title loan laws require lenders to have a license, which protects borrowers against fraud.
- In the event that something goes wrong, the borrower can take legal action against the lender.
- Any false information provided by the lender is considered predatory action.
Even if the lender checks every box, always review the title loan amount, rates, and terms before applying for credit and signing the contract.