A title loan can be a great way to get you quick cash when you need it most. If you have a vehicle with a clear title, and enough income to pay the loan back, you should be good to go. However, each state is different. So, as a resident of the Grand Canyon State, you may wonder what qualifying for a title loan in Arizona entails. Read on for that and more.
Just What is a Title Loan?
This is a short-term secured loan that uses the title to your car, truck, RV, boat or motorcycle as collateral. So, if you don’t make payments, you will lose your property. You must understand this going in. However, it’s the collateral aspect that keeps approval rates high.
A primary feature of title loans is the fact that you get to keep your vehicle during the life of your loan. It’s your title that must be relinquished until the funds are repaid.
How Much Can I be Lent?
It depends on the company and your vehicle’s value, but loans generally range between $100 and $10,000, sometimes even more. Among other things, most lenders will factor in the vehicle’s make, model, age, mileage, and even trim level, when deciding on a sum.
What Must I Provide?
Many lenders will allow you to apply online. In addition to your title, they will generally need from you a photo ID, recent photos of your vehicle from all angles, and proof of residence and insurance. You almost must prove that you have the income to repay your loan. That could be in the form of pay stubs or bank statements.
Qualifying for a Title Loan in Arizona
As we say, each state has its own rules and regulations regarding how title loan companies can operate. Within those, of course, each company is different as well. Here are some specifics you should know when it comes to getting an Arizona title loan:
- A cap on interest rates. For loans of less than $500, the monthly interest rate will be between 15 and 17 percent. For loans of more than $500 but below $2,500, the rate will be 15 percent. For loans of more than $2,500 but below $5,000, the rate will be 13 percent. For loans of more than $5,000, the rate will be 10 percent. If the title loan company charges you more than the above rates, you can legally cancel the contract.
- Surplus returned upon seizure. If your vehicle is seized and sold for more than the loan amount, you get the surplus.
- Extra repayment time. Arizona requires lenders to provide borrowers with an additional repayment period. So, if you think you’ll be late with a payment, let your lender know. However, you may be hit with a late fee of 5 percent to 10 percent of the unpaid balance.
- There’s no credit check. In Arizona, your collateral is sufficient.
- Lenders are held accountable. If a lender skirts state regulations, it must pay fines of up to $1,000, and risks losing its license.
- Terms can vary. Terms can exceed 30 days if both parties agree. However, the repayment date must be made clear.
Other than that, Arizona requires borrowers to be at least 18, have a government-issued photo identification, and be in possession of a title in their name.
Qualifying for a title loan in Arizona is relatively easy and straightforward, and you have extra protections and more flexibility, to boot, compared with some other states. If you have a car with a clean title and are 100 percent certain you can pay the loan back, a title loan may be what you need to satisfy your needs.