Columbus residents who need cash quickly have the option of getting a title loan, using their vehicle as security. However, before you turn over your title, you need to know what you are getting yourself into. You can wind up having your vehicle repossessed if you are unable to pay back the loan as expected.
The seasoned Ohio debt-relief attorneys at Fesenmyer Cousino Weinzimmer in Columbus, Dayton and Cincinnati can help you understand the benefits and risks of title loans, as well as the alternatives that are available. We know that even the most well-meaning and hard-working people can unexpectedly find themselves overwhelmed by debt and needing a fresh financial start. Even if you face having your vehicle repossessed, we can often find ways to allow you to keep ownership.
Auto title loans appeal to people with bad credit, as they allow you to borrow money for a short term, using the title to your vehicle as security.
Title loans generally average from $200 to $10,000, but can be for up to $20,000. While these are usually short-term loans (30 to 60 days), they can be renewed and be for up to 36 months.
Once you hand over your title, the vehicle is no longer yours until the loan is paid back, even though the lender does not transfer the title from your name. You get to use and drive the vehicle during the repayment period. Interest rates can be exorbitantly high, sometimes 300 to 700 percent. You cannot sell the vehicle or transfer it until you pay off the loan. If you can’t pay, the title company can repossess your vehicle and sell it to recover the money you still owe, and you will also be responsible for repossession and administrative costs and fees.
In Ohio, title loans are made under credit services organization (CSO) or mortgage loan laws. Although Ohio’s Short-Term Loan Act specifically prohibits lenders from accepting a car title as collateral for a short-term loan and caps the interest rates on short-term loans at 28 percent, lenders find ways to get around this. Title lenders operate under Ohio’s Credit Service Organization Act, which allows CSOs to charge fees to “offer credit repair, debt counseling and related services.” The CSO acts as a broker to get you a title loan from a “third party,” and charges to do so, adding to high interest rates.
In Ohio, you and the lender must sign a written agreement before you get your loan. The agreement you sign must state how much you are borrowing and what your interest rate will be. The agreement must also state what can happen if you do not repay the loan and what the lender must do before repossessing your vehicle. You must be notified 10 days in advance of the time and place of the sale and have the chance to arrange to hand over the vehicle instead of having it repossessed by an agent, and you must have a chance to remove any personal property from the vehicle. The lender has to give you an accounting of what is owed, and you must be given the chance to get your vehicle back by paying the loan and any reasonable expenses.
The Ohio attorney general’s office notes a joint study by the Consumer Federation of America and the Center for Responsible Lending finding that the average consumer takes out a car-title loan for $951 and renews the loan eight times. With an annual percentage rate (APR) of 300 percent, consumers may wind up paying about $2,142 in interest alone. One out of six loans end in repossession of a car, which adds a typical fee of between $350 and $400.
The following is a list of some of the title loan companies operating in the Columbus area:
There are limited circumstances where you can benefit from a title loan, even though the interest you will be paying is probably exorbitant. An example might be when you have a temporary shortfall but know you will have the money to repay the loan within the 30- to 60-day period. However, in most situations, title loans get you even deeper in debt and risk the loss of your vehicle.
If you are having cash-flow problems, there may be options for you that are better than taking title loans. Fortunately, filing for bankruptcy provides a way to stop repossession. Even if you already have a lien on your vehicle, you may be able to resolve your back-due car loan payments through a Chapter 13 bankruptcy and wind up keeping your vehicle.
Car-title loans are allowed to be included if listed in a bankruptcy, and you probably will be able to keep the vehicle if you continue to pay the loan after your bankruptcy case closes. Also, if your car or truck has already been repossessed, you may be able to get it back if you act promptly. Bankruptcy is a powerful legal tool that can protect you from the abuses of auto title loans. Learn how our Ohio bankruptcy law firm can help you recover and move forward.
If you find yourself drowning in debt, the Ohio bankruptcy lawyers at Fesenmyer Cousino Weinzimmer are ready to make your case an urgent priority. Take the first step toward debt relief and contact the experienced and compassionate debt-relief attorneys at Fesenmyer Cousino Weinzimmer today for a FREE INITIAL CONSULTATION.
Delaying can only make your situation worse, so call the Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer today at one of our conveniently located office branches at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati), or email for your free consultation so we can determine what debt relief solutions will work best for you.
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