Consumers Beware! Jacksonville Title Loans Are Back.

April 23, 2018

Innumerable residents of Jacksonville have got into a vicious cycle of debt owing to different types of secured and unsecured loans, one of them being title loans. It is true that title loans are at times more reasonable than payday loans, since the latter usually has higher rates of interest. However, many title loans can have just as high a rate of interest as that of a payday loan. This is despite the fact that payday loans do not require any security.

Title loans require your car to be used as the collateral. Should you fail to repay the whole loan amount along with the accrued interest, the lender can seize and repossess your vehicle, sell it at an auction or through other means and recoup the money it had lent you. What is worse is the fact that if the lender does not manage to recoup the entire loan amount and the whole interest, then you would still owe them money, even after losing your car or vehicle.

Repossession Ran Rampant

Thousands of people in Jacksonville have woken up late at night or in the wee hours of the morning to find a tow truck or wrecker in front of their house, poised to whisk their car or truck away. Many of these people, who had borrowed money from title loan lenders, needed their vehicles for work. It is not uncommon for professional drivers and truckers to pledge the title of their vehicle to get a quick loan.

Title loan lenders have always advertised themselves as the best friend of people in dire times. They have always offered instant financial assistance to whoever needed it, provided they owned a car, truck, recreational vehicle or even motorcycles. Unfortunately, the title loan lenders did not make it obvious that they would charge 200%, 300% and in some cases 400% interest per annum. Many lenders charged compound interest.

Title Loans Were Banned in Jacksonville

Jacksonville residents breathed a sigh of relief when title loans were illegalized a few years back. However, they are now back in full swing, albeit with some regulatory measures. Do not opt for title loans till you know the full story. Lenders are no longer allowed to charge 200%, 300% or 400% interest per annum. They cannot charge compound interest. Not every lender is legally permitted to offer title loans, unless they are registered to do so. The licensing for the same must be renewed every two years. Hence, any lender that may have had its license generated in 2016 will no longer be able to offer title loans today, unless the license has been renewed.

There are two chapters in the Florida Title Loan Act that lay out the applicable laws. First, every title loan provider must offer an agreement in writing. The borrower must read the agreement and should be able to understand all the terms of lending and subsequent repayment. Nothing should be concealed or left unexpressed. Any term or condition that is not mentioned in the agreement simply does not exist and will hence be unenforceable. The agreement must lay out in black and white the exact circumstances that will determine seizure and possession of the vehicle, followed by its sale or reclaim by the owner upon repayment of the loan and interest.

Licensed lenders will be able to offer title loans without misrepresentation and negligence but they shall not charge more than 30% interest per year if the vehicle is worth less than $2,000. This is a simple interest rate, not compound interest. The rate is further reduced to 24% for vehicles that are valued more than $2,000. Vehicles worth $3,000 and over will draw an interest rate of 18% per year. No borrower should be compelled to pay any interest higher than that determined by these rates. If any lender in Jacksonville offers you a higher rate, you seek the intervention of the Department of Financial Services, regardless of whether or not you proceed to apply for the loan.

New Requirements

Borrowers in Jacksonville and across the state of Florida must be at least eighteen years of age and should have a verifiable income to qualify for title loans. This is something that many lenders had exploited in the past. Many lenders would not verify the income of borrowers and they would lend money, knowing well that the customers will get into the vicious cycle of debt. Some lenders had a clear intention of seizing the vehicle so they could sell it off and make more money than the loan amount. Some lenders offered a second loan to pay the first and then a third and this would allow review of interest rates, thereby rendering the borrower helpless and setting them back by several thousands of dollars.

Title loans in Jacksonville and in the state of Florida are legal and regulated but you should be cautious as you assess the lofty promises and the compassionate promotional appeals of the lenders. If you must apply for a title loan in Jacksonville, stick to reputable lenders like Titlelo, Embassy Loans, or TitleMax.


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