While Title Loans are not legal in West Virginia, few of the citizens of the state still go to the other side of the State, across the State lines to procure them. However, they should be careful enough in gaining the possession of such loans and must pay heed while applying for it. You should always think the high-interest rates and the risk of losing the car.
However, a Title loan is a practice of borrowing money for a short-term period, secured by the title of the car as collateral. It is also referred to as car title loans. Such loans usually last for 30 days or less. The lender may seize the vehicle if the borrower defaults on the loan.
The laws that dominate Title loans vary from one country to another, one state to another or even a distinct town. Loans are legal unless prohibited by the State. State law solely regulated them with the fundamental conviction that according to federal law, it is legal only if the State allows it. Whereas, West Virginia does not allow car title lenders to work and control within the State.
Several cons for permitting Title lenders to operate in the State
- The interest on these loans is higher compared to any other loans. Sometimes, they exceed 100% annually and offer rates that are even higher than credit cards. They are expected of rapid and quick payments.
- Sometimes, Repossession is not the end of these loans. There is a likelihood of losing the vehicle if the amount which is the outcome of high-interest rates, is not paid. Therefore, with default, the vehicle can be seized and if the required amount is not generated, the difference is still to be paid off. However, this rarely happens.
- They place a lien on the borrower until you repay the amount.
The available alternatives for Title Loans
- Payday loans: The repayment is due within a month, which includes the amount plus interest. The key feature is that they do not ask for any collateral security. It can be applied in online and offline modes and involves same day funding.
- Credit card cash advance: they can gain a cash advance through ATMs. It is potentially faster than a title loan and requires no collateral and comes up with lower APRs.
- Short-term loans: It includes Payday and Installment loans. Installment loans are in greater amounts and permits to repay over a few months. An amount of $10,000 can be borrowed in case of Installment loans. It can be applied online and in person. Collateral security is not necessary.
- CDFI loans: Community development financial institutions are non-profit organizations that provide financial help to under-served sections and communities. They are more affordable than title loans and improve their financial position and health. Small dollar loans are also available.
- Payday Alternative loans: are offered by federal credit associations with a processing fee up to $20 and can borrow money from a range of $200-$1000.