What You Need to Know
In the state of Kansas, every lender is entitled to ask their prospective borrowers to meet specific requirements, like having a list of references that can vouch for you being a good borrower or a requirement for you to have insurance on your vehicle. The amount of money you can borrow is at your lender’s discretion, and they may choose to base it on the market value of your vehicle, your amount of income, or any other number of factors.
The state regulates some of what title lenders are allowed to do in the interest of the consumer, so not only are they prevented from acting in a number of predatory ways but what they are and aren’t allowed to do is clearly laid out so that you can know all of your rights before taking out a loan.
While the state regulates title loan lenders, they do not play a role in every decision. However, when it comes to late fees your lender is only allowed to charge you 5% of the loan installment you were late on, or $25, whichever is less. Therefore, if you are late in paying a $200 payment, you can be charged no more than $10, because 5% of 200 is $10. However, if you were late on paying a $600 installment you would only have to pay $25 even though 5% of 600 is $30.
Extensions & Refinancing
If you decide to get a loan, you will have up 30 days to repay it, including interest charges and other fees. Nothing prevents you from paying off the loan sooner than 30 days, and your lender cannot charge you a penalty for paying early. If you cannot pay it in full during those 30 days and would like an extension, you can only extend the loan for two additional 30-day periods. Extensions are not automatic or guaranteed, you and your lender must agree to an extension. If you are able to get an extension, your lender is not allowed to charge you a higher interest rate for the extension than he/she did at the time of the original loan.
- Your full name, Social Security number, physical description, birth date, and address.
- The VIN and plate number of the vehicle being as collateral, with a description.
- The identification number and the name of the lending agency.
- The name and address of the title loan office.
- The state bank commissioner’s name, address and telephone number.
- The date the contract is signed and executed.
- A statement confirming your right to cancel the loan contract within 2 business days.
How You’re Protected from Repossession
If you default on a loan for at least 10 days, your lender may begin to take steps to repossess your vehicle. Your lender must first give you a notice of your default and allow you the ability to avoid repossession by paying the outstanding balance within 20 days of the notice.
Only after the 20 days have passed without you paying off your outstanding balance can your lender repossesses your vehicle. After the 30 days, your lender is well within his/her rights to repossess your vehicle. The state does not require them to give you any additional notice or to carry out any additional process, like getting a court order. It is now possible for your vehicle to be repossessed at any moment. However, your lender should be acting in accordance with Kansas laws relating to repossession, including not using force or violence to repossess your vehicle.
After your vehicle has been repossessed, your lender should give you another opportunity to pay your debt in full and get your car back. If you are still unable to pay, your lender may sell your vehicle to cover the loan’s balance. Once your vehicle is sold, you should be notified again by your lender with an accounting of what was collected at auction and what your balance is now. If the car sold for less than what you owe you will still owe your lender the balance. This is not the case in all states, but in Kansas, if you owe $3,000 and your car sold for $2,700 you would still owe your lender $300 and they can take legal action to collect it.
Outside of what the law requires, title loans can vary widely from lender to lender and on a case-by-case basis. Be sure to read your loan document carefully before agreeing to be bound by its terms. It is a legally binding contract.
“2015 Statutes.” Kansas State Legislature, 2017,