Arizona was among the hardest hit states in the country during and after the financial crisis of the past decade. Only Nevada recorded a greater loss in jobs than Arizona. Corporations based in many states may have lost more money, in market cap or liquidity, but ordinary Americans were most affected in Arizona and Nevada. This is also a reason why these two states have taken such a long time to recover. Growth rates across many states swung back from their post recession lows in two to five years. Arizona took almost ten years to witness a substantial recovery.
The Purpose of Title Loans
2016 and 2017 have been moderately encouraging years for the economy in Arizona. The healthcare and real estate sectors are on a path of resurgence. The finance and service sectors are employing more people and it is being anticipated that retiring baby boomers will pave the way for enough vacancies that will resolve the unemployment crisis in the state. However, the banks are still holding onto their stringent grip and are yet to adopt lenient lending policies. The housing market has not recovered to its pre recession state. There are many who do not have enough cash on them and are hence looking for title loans to pay their debt or to take care of their monthly bills.
According to online lender titlelo, “auto title loans have become an obvious choice for Arizonians looking for a short-term secured loan”. Payday loans and other unsecured loans charge too heavy an interest and it defeats the whole purpose of trying to manage debt and control expenses. Title loans using a vehicle as the security are a more pragmatic option. These loans are licensed and regulated in the state of Arizona. There is a state law supplementing the federal law. There may be local laws in certain counties and cities that further supplement the state law.
Arizona Title Loan Laws
Title loans are offered by lenders that are known as secondary motor finance companies in Arizona. The state law mandates that the total interest a lender can levy on a borrower should not be more than 17%. If the value of the loan or the loan amount is up to $500, the rate of interest cannot be more than 15%. For loan amounts ranging from $500 to $2,500, the interest must be a maximum of 13%. For title loan amounts greater than $2,500 but less than $5,000 and a maximum of 10% for loan amounts greater than $5,000.
If you are being charged a higher rate of interest for the given loan amount according to the caps assured by law, you can take legal action against your title loan lender. Title loan lenders can cease and possess your vehicle should you fail to repay or not pay the entire loan amount along with the accrued interest. However, the lender must get an appropriate order to that effect from the court. You can always ask the repo for such a legal document before you permit the seizing of your vehicle. This does not mean your vehicle will be sold straightaway. You can work with your lender, ask for some more time, repay the remaining loan amount with interest and reclaim your vehicle.
Repossession and Extension
All title loans must be executed only after the whole agreement is put in writing and both parties understand all the terms. There should be no confusion or concealment of any facts whatsoever. Borrowers have the right to ask as many questions and they can seek as many clarifications as desired. The lender has the right to seize and sell the vehicle after the term and if the loan is not repaid. The lender has the right to keep any profits from the sale. If there is a shortfall, then the borrower may have to pay the balance. Should a borrower work out a deal with a lender wherein the former will pay the remaining loan amount with interest and repossess the vehicle, there could be additional expenses to be paid that the latter would have incurred in seizing and towing the vehicle. Any such agreement between the lender and borrower with both parties agreeing to an extension should also be executed in writing. No verbal agreement is legal for title loans in the state of Arizona.