As you might expect, borrowing money from any business that puts food on the table through profitable lending will ask for more than just the loan principle (the actual amount borrowed) in return. There's always a percentage of interest that comes with it, and some lending firms will also include processing fees on top. Miami car title loans work pretty much the same as title-based lending solutions anywhere else, and that means you're always going to pay more than you were given in the first place.
It's essential to inquire about the interest rates and overhead fees that come prepackaged with the loan that you're carrying out in order to avoid malicious lending agreements that can result in a cycle of debt and overall financial ruin. In addition to title loan interest rates, you also have to factor in the installment frequency and how much is owed in the event you fall short of the mark. Every lending firm will handle things a little differently, but there are laws that prevent any lender from exceeding certain boundaries, including title loan interest rates.
While title loans are often thought of as the most balanced and efficient solution, they do come with caveats that other loan options don't bring. This doesn't necessarily mean that you shouldn't consider auto loans when you need to borrow cash in a pinch; it only means that you should proceed as cautiously with title-based lending services as any other. We're here to show you the way to success and secure both peace of mind and a sense of being fully informed before committing.
It's important to understand that not every state will cap title loan interest rates at the same figures. In Florida, the rate tops out at 30 percent annually for auto loans of $2,000 or less. This goes down to 24 percent for figures greater than $2,000 but less than $3,000, and for loans exceeding $3,000, it drops to a mere 18 percent. While it may seem high, consider that this is a significant benefit over payday and cash advance solutions, which typically land between the 300-500 percent marks.
The good news is, these percentages are just annual rates. For example, let's say you borrow $1,000, which is capped out at 30 percent interest. Assuming the lender actually assesses the full 30 percent, that means you pay an extra $300 per year on top of the $1,000 principle. The interest is broken up on a monthly basis, meaning that in this example, you'll spend an extra $25 per month as long as the principle is still owed. Of course, this also means that if you pay it off inside one month, you only owed $25 total in interest. That's actually not so bad!
Naturally, the rates that are involved with mortgages and car payments will be much lower because they're long-term commitments to large sums of money. These loans will usually strike somewhere between the 2-8 percent marks, if it gives you an idea of scale. However, there are still fees to account for when carrying out short-term lending solutions such as title loans. Most title-based lenders will charge roughly $100 for every $1,000 borrowed, although this can vary drastically and even be waived entirely if the lender so chooses.
Title-based lending solutions are illegal in 30 states, and it's thanks to the lack of restrictive laws that otherwise would prevent predatory lending practices from proliferating. Florida is one of a handful of states that force auto loan firms such as ours to keep the obligatory overhead charges at a minimum. Usury is a felony wherein a lender assesses title loan interest rates that exceed a legal limit, and it can often run a title-based loan business into the ground if they're found guilty of a single offense. That's before the damages are paid to the affected client.
In the event that an auto loan company commits usury in Florida, the offending company must do the following:
For this reason, carrying out auto loans in Florida is an ideal scenario that helps you get back on your feet more so than if you tried to do the same in other states. By the same token, payday and cash advance lenders are still far more expensive solutions on the whole.