Title Loan Regulations in Delaware
A title secured loan is a loan that you can take using your vehicle as collateral. When a vehicle requires an emergency repair, most people find it difficult to fund such an expense. This is because most people in our societies live from paycheck to paycheck, meaning they do not reserve any money for emergencies. This makes a title loan the best option for survival during emergencies.
30 states in the United States have banned title loans. However, some states like Delaware have allowed the sale of title loans, albeit under strict laws to cushion consumers from exploitation. Title loans are short-term and are usually referred to as pink slip loans or title pawns.
Title Loans in Delaware
In the state of Delaware, car title loans are relatively easy to obtain since the state authorities haven’t set a cap on title loans’ interest rates. As such, lenders are free to set the interest rates as will be negotiated with their client. With the absence of interest rates’ caps, the state has set laws to protect the borrowers from exploitation.
Requirements to qualify for a title loan
• A valid government issued identification card
• Your car with a clear car title
Other information required for the processing of a car title loan include:
• Your physical address
• The vehicle model
• The vehicle mileage
• The full legal number
• Contact number
Conspicuous Disclosures and Title Loan Laws
A lender must make some disclosures before signing a loan title agreement. These disclosures include:
1. The loan given is a short term one. As such, it cannot help you in solving other pressing needs.
2. You are not compelled to take the loan just because you have given information during the application process
3. If you agree to take the title loan, the lenders will get a security interest in your vehicle. In case you default in repaying the loan, the lender can take your vehicle and auction it.
4. In the event the lender takes over the ownership of your vehicle, you lose equity in it.
5. You are free to turn down the loan agreement for free. This can be done during the period between which you enter into the agreement till the end of the working day on which you were awarded the loan. You only need to return the amount you borrowed to the lender.
6. You can get any necessary information on credit counseling to boost your awareness on credit and loans. This information is available at State Bank Commissioner’s office.
7. If you feel that you have been cheated or robbed in the loan acquisition, you can register your complaint with the State Bank Commissioner’s office.
What happens in case your Car gets repossessed in Delaware?
If you take a car title loan in Delaware, your car is used as collateral. If you fail to pay back the loan, the vehicle is repossessed by the lender. The Delaware title loans require that you hand over the original vehicle title and keys to make it easy for the lender to repossess your vehicle.
While the lender is free to determine the interest rates he or she prefers, it’s imperative to note that in Delaware, the average title loan interest rate is pegged at 25% per month.
In instances where a proof of income is required, a borrower can use social security, child support disability, or workers compensation as possible income sources.