The Laws Governing Car Title Loans In Columbus

By Author: Stam Bett
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If you're interested in car title loans in Columbus, it's helpful to understand the laws in place in the state which are designed to protect consumers from predatory lending. Columbus car title loans are straightforward, short-term secured loans based on your car's value. Lenders hold onto your car's title as collateral until your loan is paid off, and this allows these loans to have lower interest rates, just like auto loans and home mortgages have lower interest rates than credit cards.

Before you consider applying for car title loans in Columbus, make sure you understand how state laws affect you.

How Much You Receive
Your vehicle's value determines how much you get with car title loans. Columbus allows up to $20,000 with terms up to 36 months. When you sign the agreement, the lender will hold onto your vehicle's title as security and you continue driving your car until you pay off the loan. If you feel like you may default, lenders are almost always willing to work with you by changing the terms. The amount of car title loans in Columbus varies by lender, but it will take into account your car's year, ...
... make, model, condition and mileage.

Short-Term Loan Act in Ohio
Passed in 2010, this law caps the APR on Columbus car title loans at 30%, including fees and interest, regardless of how much you borrow. The loan must be at least 31 days, unlike many payday loans which are designed to last only two weeks, and the loan can be no longer than four years. Despite this maximum APR of 30%, you'll find many lenders charge much less. Some will charge a higher APR of 20%, for example, for loans up to $2,000 and a lower APR like 18% if you borrow over $3,000.

Other Laws Regarding Columbus Car Title Loans
There are also other laws that govern car title loans. Columbus lenders, as well as yourself, must sign a written agreement before you receive your loan under Chapter 537. Make sure you read this agreement completely before signing as it will tell you how much you are going to borrow and your interest rate.

This agreement must also explain that you risk repossession of your vehicle if you don't repay the loan. With car title loans in Columbus, lenders may repossess your car, sell it and keep proceeds up to the amount you own and reasonable expenses, but you must be notified before your car is repossessed.

You also have the opportunity to pay back your loan and reasonable expenses up until the car is sold, and the lender must tell you 10 days in advance of the time and place of the sale and tell you what you owe.

While this sounds a bit scary, remember that all secured loans face this same risk, whether it's a mortgage on a house or a car loan from a dealer. The risk of repossession with Columbus car title loans is actually very small, as lenders understand it is very expensive and time-consuming to repossess cars. Instead, contact your lender if you're having problems to have your loan terms changed to something more affordable.

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