What is an Arizona Title Loan?
An Arizona title loan is a title loan for the state of Arizona. Titles loans are loans given with the agreement that, if the borrower fails to make a payment, an agreed upon asset (usually an automobile) will be repossessed. The amount of a title loan will depend on both the value of the asset, and regulations which the state may have regarding title loan limits.
Every state in which title loans are legal has its own regulations in place for protecting borrowers from falling too badly into debt. However, states vary in how many regulations exist or in how effective they are. In Arizona, for instance, there is no standard maximum for title loan amounts, so maximums are usually determined in terms of a percentage of the value of the asset (usually 30% – 50%).
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Arizona has a sliding interest rate maximum, meaning rate limits will depend on the size of the loan. Maximums are as follows:
For loans of $500 or less: 17% per month
For loans between $501 – $2,500: 15% per month
For loans between $2,501 – $5000: %13 per month
For loans of $5001 or higher: 10% per month
Arizona does not require credit checks for obtaining title loans. And unlike most states, Arizona does not require that lenders hold on the borrower’s car title (though depending on the company lenders may still choose to do this). This means obtaining an Arizona title loan requires only being 18 years or more of age, a government issued state I.D. and a lien-free automobile as collateral.
Arizona legislature states that:
AZ Rev Stat § 47-9609 (2017) – Lenders may take possession of vehicle upon default and does not require judicial process as long as such can be done without disturbing the peace.
AZ Rev Stat § 47-9610 (2017) – After taking possessions, the vehicle may be sold at any time or place that is “commercially reasonable.”
AZ Rev Stat § 47-9612 (2017) – lenders must provide at least 10 days notice before repossessing the vehicle.