What is a Louisiana Title Loan?
Louisiana Title loans are loans for which the borrower uses an asset as collateral. This secures the loan for the lender, who may then repossess the asset (usually a car) to sell and pay off the loan. This makes title loans relatively easy to obtain; all that you need is a suitable asset to serve as a title. Title loans are usually small, short, and high-interest. Rather than basing loan amounts on your credit status, lenders will set the details according to the value of the asset. Rates, however, are usually high, and in some states can even be as high as the lender chooses. In other states, there are caps on interest rates, along with other regulations to protect borrowers from predatory lending. In some states, title lending is not even legal. Below, we at Online Loans have broken down the assorted information available across the web into a convenient need-to-know to make getting you title loan as simple as possible.
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Title lenders usually set interest rates very high. In many cases, they will feature an APR as high as 300%. Some states, in order to protect borrowers from falling to severely into debt, posit restrictions on how high lenders can set interest rates. In Louisiana, rates cannot be higher than 16.75% per annum, then 36% per annum after maturity, and back down to 18% per annum one year after that if the principal has still not be paid off.
Because title loans are asset-based, lenders often will not take into account the borrowers credit. This means all that is generally required to obtain a title loan in most cases is a lien-free asset (such as a car) and government issued I.D.
Louisiana legislature restricts title lending as follows: 3578.4. – Lenders may not charge interest rates higher than 16.75% per annum. After maturity, interest may be raised to 36% per annum for a period of one year. After this year, the rate must be reduced to 18% or less per annum. 3578.6 – Lenders may not renew a deferred payment unless the borrower presents a partial payment of 25% of the remaining sum.