Title loan interest rates will vary depending on where you live, as each state has different restrictions and caps on secured loans. Still, on average, the annual percentage rate can range from 20% to 175%. Keep in mind that the APR listed here reflects a percentage on a yearly scale and the rates can be even higher in some extreme circumstances. Therefore, it’s in your best interest to pay back online title loans as quickly as possible to avoid monthly finance charges.
Other fees that you can expect from online car title loans can include, but are not limited to, the APR (a percentage of the loan amount), application charge (typically $30 – $100), administrative charges, processing fees, and late charges. Sometimes, you may be assessed a renewal fee ranging from 1.5% to 10%. As is the case with the APR, many states have restrictions and caps when it comes to late charges and other administrative fees.
Consider The Quoted Interest Rate Before Taking Out A Title Loan
Some states cap the interest rates you can face on an auto title loan, but if it is not an option in your state because there are no limits 
or they are higher than the state limits, then why use one? With that in mind, we recommend using title loans and other types of unsecured loans only when absolutely necessary and seeking out different forms of financial assistance like credit unions or short term installment lenders like. You should only consider online title loans if you have no other choice because title loans have some of the highest interest rates and finance charges. Be sure to check the lending disclosures for any finance company you work with.
What Percentage Of Borrowers Will Pay Back A Vehicle Title Loan
We’re not surprised that over 70% of secured lending applicants will ultimately pay back any money they borrowed. Borrowers who take out equity loans typically don’t have a lot of other options. Plus, even if a borrower has bad credit, a car is still a valuable asset and usually worth more than the amount needed to be borrowed. Of course, there are some borrowers who can never afford to repay their loan because they make less money or have higher monthly expenses but the vast majority of borrowers do eventually pay back the amount borrowed and face little to no risk of a title loan default.
Can I Make Extra or Early Payments To Avoid Excessive Finance Charges
Yes, you can always pay back your loan early and that’s something that should always be recommended if you have the means to do so. Since title loans are meant to be short term, there is not usually an early repayment fee associated with them. Remember to ask your lender if they charge a prepayment penalty before you sign off on the contract.
What Else Know About Title Lending Interest Rates
Before you agree to take out an online title loan, it is important that you understand all of the terms and conditions associated with the loan. This includes understanding the interest rate and fee structure. Be sure to ask questions if you are unsure if the loan has an adjustable interest rate or if it’s fixed for the life of the loan. Adjustable rates are not common with auto title loans, but they do exist and you don’t want to be in a situation where the interest rate actually increases when you thought it was fixed!
Another aspect of interest rates with online title loans to keep in mind is whether or not there are any prepayment penalties. This means if you decide to pay off the loan early, will the lender charge you a fee for any interest charges they’re missing out on because of your early payments? Some lenders do not charge a fee for missed finance charges, while others may charge a small percentage of the total loan amount. Seek out the nearest title loan companies that are licensed in your state and willing to disclose all the costs that come with your initial application.
Title Loan Lending Fees And Charges – What To Know
When it comes to fees, there are typically two types of fees associated with title loans: origination and rollover fees. Origination fees are charged when you first take out the loan and are generally a percentage of the total loan amount. Rollover fees are charged if you extend or “roll over” the loan and can also be a percentage of the loan amount. These fees can add up quickly, so it’s important to understand all of the costs associated with title loans before you apply and sign a lending contract.
In addition to the interest rate and fees, you will also be responsible for paying any other associated loan costs, such as taxes and insurance. This includes maintaining your current vehicle insurance and paying to keep the vehicle registration up to date even if the lender still has your car’s title. Make sure you factor these additional costs into your budget when determining how much you can afford to borrow.
