What You Need to Know
The state of Florida requires title loan lenders to be licensed. They are being regulated by the state to protect you, the consumer, against things like fraud. That also means that in the unlikely event things go wrong, or a lender does not follow the laws set forth by the state, you can take legal action.
For example, if you got a loan from a lender that was not properly licensed the loan would be considered void. You would be entitled to recover any money paid and not required to pay any balances. You could even take legal action if you needed to and receive reasonable attorney’s fees. The state has also laid out specific, often predatory practices that lenders are not allowed to engage in.
- A lender cannot refuse to accept partial payments towards a loan balance.
- A lender cannot sell or charge for any insurance.
- A lender cannot charge a penalty for paying all or part of a loan off early (known as a prepayment penalty).
- A lender cannot advertise themselves using phrases like “interest-free loans” or “no finance charges.”
Payment & Interest Rates
Once you have decided on a title loan lender, you and the lender will enter into a written agreement. The agreement should include the details of the property and the names and details of all of the owners of the property. The lender will also agree on a date for repayment, at least 30 days after the date of the loan. If both you and the lender agree, the repayment date may be extended for one or more 30-day periods. Extensions must be done in writing and in a separate extension agreement.
By or before the agreed repayment date you should pay the lender the full amount as agreed. That means the amount borrowed plus the agreed upon interest. The law also regulates how much interest a lender can charge. Interest limits are presented below.
- 30% per year on the first $2,000 borrowed
- 24% per year on anything borrowed between $2,000 and $3,000
- 18% per year on anything borrowed over $3,000
A Title Loan is a Binding Contract
A loan agreement is a legal document. When you get a title loan, you are claiming in a legal document that the motor vehicle is not stolen, that you have the right to offer it as collateral, that there are no liens against it, and that you will not try to get a duplicate title before the loan has been repaid.
The lender may take possession of the title of your vehicle until the loan is repaid, but you continue to have full use of the vehicle. In addition, for the period of the loan you and you alone, have the right to redeem the loan property (your vehicle title). During the repayment period, you do not have to worry about someone else claiming your title by paying the balance of the loan or through any other agreement.
If at any time the agreement document you were given is lost, destroyed, or stolen you should immediately let the lender know. Your lender must be notified in writing by certified or registered mail, return receipts requested, or in-person with a signed receipt as evidence. A lender cannot charge you for a copy of the agreement.
How You’re Protected from Repossession
If the loan is not repaid within 30 days of the original repayment date or the last date of any extension, then a lender can take steps to repossess your vehicle. The lender should give you a reasonable and convenient time, place, and date to remove personal belongings from the vehicle and turn it over to the lender. If it is not possible to arrange a delivery, then the lender can employ a licensed repossession agent to repossess the vehicle.
To recover the unpaid amount of the loan the lender may then sell your repossessed vehicle through a dealer. But at least ten days prior to the sale the lender must let you know the date, time, and place of the sale, and give you a written accounting of what you owe. That means the amount borrowed + interest up to the date of repossession + reasonable expenses of repossessing and selling the car.
If payment is not made, and the sale is completed you may still see some of the proceeds. Within 30 days of the sale, you are entitled to receive any money in excess of what you owe the lender. For example, if you owe a total of $7,000 (including expenses related to repossession and sale) and your car sells for $10,000 then you are entitled to the $3,000 in excess within 30 days of the sale.
All laws and procedures presented here apply all across the State of Florida. However, individual counties or municipalities may still adopt ordinances that vary from what state law says. Therefore, to fully understand the laws of title loans you will need to research if your county or municipality has any specific regulations.
“The 2017 Florida Statutes.” Online Sunshine, 2017,