Why Military Members Can't Get Texas Car Title Loans

By Author: Stam Bett
Total Articles: 452
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If you live in Texas and you're strapped for cash, you might be wondering if car title loans in Texas are a good option for you. These short-term loans are secured by your car's title and they're easy to qualify for. Lenders will not check your credit, so past credit issues will not bar you from getting the money you need to pay important bills, avoid late fees, get your car fixed or get through a tough situation.

Most people can qualify for Texas car title loans, as the basic qualifications include being over 18 and owning a car outright with a clean title. Still, not everyone will be able to take advantage of these convenient, fast loans and you may be denied for Dallas car title loans for a few reasons. If you are an active duty member of the military, or you are dependent upon someone in the military, federal legislation could be standing in your way from getting the loan you need today.

The Military Lending Act of 2007 is the primary obstacle for military members and their family who wish to apply for Texas car title loans. This legislation is a part of the National Defense Authorization Act of 2006, and ...
... it makes many changes to lending practices in the United States to members of the military. The Department of Defense released a report finding that 17% of military personnel use payday loans, and they determined this had a bad effect on morale, among other things. The legislation, once signed, required the APR for military borrowers to be no higher than 36%, and it also barred lenders from securing loans to military members with personal checks, wage allotments, debit authorizations and title loans.

This law banned the use of a car's title to secure any loan made to service members and their dependents, and it also prohibits lenders, including car title loan lenders, from renewing or rolling over a loan using the proceeds of a new loan granted by the same lender. The bottom line is this law means car title loans in Texas are not available to military members and dependents.

This can be rough, because everyone knows it's just not always possible to pull together the cash for an emergency, such as important car repairs, and family members don't always have the money to lend out. Dallas car title loans have always been a great option for borrowers to get the cash they need immediately to cover emergencies until their next payday. You'll find that one of the first questions lenders now ask is, "Are you an active military member, or are you dependent on someone in the U.S. military?" If you are, you will most likely be denied for the loan.

There's no doubt this legislation had the best of intentions, limiting predatory lending practices ot the military. An unfortunate side effect is it makes it harder for military families to get emergency cash when they need it, particularly if their credit is bad. Consumers with poor credit have few options when they need cash in a hurry and, what's worse, this legislation does not eliminate predatory practices all together. Lenders may still overcharge members of the military through payday loans, provided they restructure their loans only slightly.

The bottom line is car title loans in Texas have a bad reputation, but it's certainly not deserved. After all, many lenders provide interest rates that are lower than credit cards for bad credit, and where else can consumers turn when they need to pay their mortgage or credit card bills, put food on the table, keep their utilities from getting disconnected or repairing their car to get to work?

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