Six essential facts about Title Loans:

Before getting a title loan in Virginia, make sure you know the following:

1. The maximum interest rate is between 15%-22% a month (180% – 264% APR).

– This is very high. You can negotiate a lower rate, and many lenders charge less than the maximum.  Take the time to call lenders in your area and ask what they charge.  Make sure you are comfortable with the rate and terms before signing the agreement.

2.  The lender cannot charge a loan origination fee.

– Lenders can charge a $10.00 lien fee for VA; but cannot charge a loan origination or other fee when establishing the loan.  If there are other fees, be sure to question them.

3.  You have 1 day to cancel the loan by returning the funds the same or next day.

– If you find a better source of funds, then take advantage of this and cancel the loan.  Bring the loan proceeds and agreement back to the lender before they close on the day you received the loan, or the following day.

4.  The lender can repossess your vehicle if you default on the loan.

– Find out what the lender considers a default; and how to cure a default before a repossession.  Make sure you understand how to make your payments; and what payment methods the lender accepts.

5.  The lender can charge a late fee of 5% of your monthly payment if you are 7 days or more late.

– Make sure you are not charged a late fee if you make your payment less than 7 days late.  Find out if the lender has a grace period; just because they can’t charge a late fee does not mean they will not initiate a loan default.

6.  A lender cannot legally come after you for money if they repossess your vehicle.

– If your vehicle is repossessed and sold for less than your loan balance; you are not responsible for the difference.  Be advised that you can be liable if you intentionally conceal or damage the vehicle.

Conclusion:  Read the loan agreement in full. Make sure you can meet the terms including the payments.  If you have any doubts, do not get the loan.

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