What is a Nevada Title Loan?
A Nevada title loan is a loan given in the state of Nevada based on the value of a collateralized asset, guaranteed by the lendee via the submission of a title. Regarding title loans in general, the most common form of the title loan is an automotive title loan, wherein a car is put up as collateral via the title. Title loans tend to have high interest rates, usually, around 300% APR, are usually shorter-term (around one month), and are smaller in scale compared with traditional loans (between $500 and $10,000). For more specific information on title lending in general, please see our comprehensive page detailing the subject.
In Nevada, title lenders must be registered, and have thereby been vetted somewhat by local government to avoid predatory lending practices being deployed on unaware applicants. Significantly, a title loan cannot be extended to an applicant if a pre-existing title loan is still in effect, rendering debt cycles impossible. Title lenders are not required by Nevada to cap their interest rates, leading them to frequently hover around 300% APR, a rate of interest considered predatory in many states. Finally, in Nevada, title lenders must make a cursory inspection of the income of an applicant to ensure that a given loan does not exceed reasonable expectations of repayment. Specifically, a title loan cannot exceed 25% of an applicant’s gross monthly income.
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Nevada is one of a handful of states that has not legislated a cap on interest rates for title loans. Thus, rates tend to hover near the national average at 300% APR, a rate many authorities find to be predatory.
There are no credit requirements for title loans in the state of Nevada, credit checks being waived for this form of lending.
Title loans in Nevada are legislated via the Nevada Statute § 604A.105, a broad piece of legislation that covers many forms of short-term lending. The special articles relating to title loans that make Nevada’s practice distinct are as follows:
NRS 604A.445: Title loans may not exceed 30-day terms. They may not be refinanced more than 6 times.
NRS 604A.450: Title loans will not be given exceeding what could reasonably be repaid by the applicant.