Title loans are preferred by people as they offer a lot of flexibility when compared to the traditional loans available and help the borrower keep costs significantly down. Sometimes getting a loan from a bank or credit union can be very difficult, as there may be stringent financial requirements or other obstacles. There are loan laws in Louisiana to protect customers from unfair and predatory practices of lending. Title loans are legal in Louisiana, and there are no explicit laws for title loans in Louisiana. There are certain laws that regulate small dollar amount loans, as well as long and short-term loans.
Louisiana regulates who is eligible to borrow, who is eligible to lend, how frequently one can borrow and how much a person can borrow. Louisiana has consumer protection laws in place to ensure that no one violates the loan agreements and that all parties are treated fairly.
WORKING OF TITLE LOANS
Title loans are not legal in every state, as some states consider them a form of predatory lending. Louisiana has regulations in place to limit illegal activity, and many states are attempting to limit the predatory aspects of title loans.
Title loans expose consumers to the risk of losing their vehicles through repossession. It may prove very difficult to keep your vehicle once offered for collateral on a title loan, as the interest can be extremely high. A common alternative to a title loan is pawning a vehicle. This carries the same risk, but usually will allow a borrower to receive a greater amount of money, as the lender holds the title and the vehicle as collateral.
TITLE LOAN REGULATIONS IN LOUISIANA
The borrower must be 18 years or older to secure a title loan. The borrower also needs to have an ID that is issued by the government. He or she must be in possession of a valid vehicle title showing their ownership of the vehicle, and provide a proper proof of residence and income. The title loan laws in place in the state of Louisiana require the binding contracts to list the terms, interest, and costs of the loan. This must include any fees that are applicable, in addition to the interest rate of the loan.
There are no upper limits on how much can be borrowed in Louisiana, but there is a $350 minimum. This may prove dangerous for borrowers, as it can be easier to take out a loan for more money than you can easily repay. Under the laws, the interest rate for title loans cannot be more than 36 percent. The maximum cost of the loan, including fees, is set by law. Lenders are also not permitted to penalize the borrower for early repayment.
Title loans can prove to be a viable means of securing quick funds in case of an emergency, but borrowers should be careful to do their homework, and make sure to read all the fine print before signing any contracts.