What is an Oregon Title Loan?
Oregon title loans are loans in and under the laws of Oregon, where an asset secures the loan as collateral. That is, if the borrower of a title loan defaults, the lender then has the right to repossess the asset (usually a car) that was used as collateral. Title loans tend to be small (determined primarily by the value of the asset), short-term (usually about 30-days), and have high-interest rates. Title lenders also have a history of being predatory, and many states (in which title loans are legal) have laws which regulate title lending so as to inhibit borrowers from falling too badly into debt.
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Title loans tend to feature high rates, often around 25% per month (an APR of 300%). Many states have no limit on how high lenders can set rates. In Oregon, lenders are not permitted to set an APR of more than 36%, which is a monthly rate of 3%.
Title lenders generally do not look into a borrower’s credit, as title loans are asset-based so that the value of the asset is typically enough of a guarantee to give out a loan. Most states thus require only a lien-free asset (usually a car), a government I.D.
In Oregon, the following laws restrict title lending to protect borrowers:
725A.020. – Title lenders must be licensed.
725A.062. – Interest rates may not exceed 36% per year.
725A.062. – Payment terms must be at least 31 days.