Legal

Mississippi Title Loan Regulations

Posted by Chad Deatherage on

What You Need to Know

Table of Contents hide
1 What You Need to Know
1.1 Contract Requirements
1.2 Lost, Stolen, or Destroyed Contracts
1.3 Loan Extensions & Refinancing
2 How You’re Protected from Repossession
2.1 No Additional Fees
3 References

If you fully own a vehicle (without loan payments) and are at least 18 years old, you may be able to get a title loan in the state of Mississippi. The exact amount of money you can get will vary from lender to lender and a potential lender will take into account things like your current income, and the market value of the car whose title you intend to use as collateral.

Title loans in Mississippi are governed by the Title Pledge Act under code §§ 75-67-401 to -449.

The state of Mississippi only allows title loans to be made for up to $2,500, so if you need a loan of more than $2,500 a title loan will not be the right choice for you. The terms of your loan should be laid out in a title loan agreement. It should be in writing and you should have a copy of it.

Contract Requirements

  • Make, model, year, VIN, and license plate of vehicle used as collateral
  • Name, address, date of birth, Social Security number, and physical description of borrower
  • The due date of the loan
  • The amount of the loan
  • The balance of what is owed at the due date (loan amount plus charges/interest)
  • Interest rate

Lost, Stolen, or Destroyed Contracts

You should be given a copy of all the documents you sign. If a loan document is lost, destroyed, or stolen notify your lender in writing by certified or registered mail, return receipt request, or in person. Your lost destroyed, or stolen documents will be invalidated and you will be made to sign a statement about the document being lost, stolen, or destroyed. Your lender may charge you up to $5 for handling this situation.

The state of Mississippi does not allow car title lenders to charge more than 25% of the loan amount per month.

Title loan agreements must be in writing and last 30 days. Though you may choose to pay off your loan sooner than 30 days, and if you have difficulty paying your loans you may be able to get an extension. All extensions must be made for additional 30-day periods, and when an extension is granted its terms should be in writing as well.

Loan Extensions & Refinancing

To qualify for an extension you will usually have to pay 10% of the principal of the loan, and the interest owed. If you cannot reduce it by 10% your lender may, but is not required to, reduce your principal amount by 10% when assessing fees. You will still owe the full or remaining principal but you will not be charged interest or fees on it. To illustrate, if you need a payment extension on a $2,000 loan at 20% interest you will have to pay $200 (10% of the principal) plus $400 (interest owed at 20%). If you cannot afford to pay $600 to get an extension, you will not be given an extension or your lender may accept the interest only and lower your principal.

If you end up getting a title loan your lender will keep you title, and you will keep your vehicle. Your lender may secure a lien against your title to protect their interest in the event you cannot pay the loan back. However, if and when you do all liens should be released and your title returned to you.

How You’re Protected from Repossession

If you fail to pay the balance of your loan within 30 days after the due date, your lender can repossess the vehicle you used as collateral in your loan without taking any other steps, like getting a court order. The right of ownership will belong entirely to your lender, and he/she will have the full authority to sell or dispose of the vehicle.

If your lender determines your vehicle is salvage, your vehicle can be sold immediately upon repossession.

But even after your vehicle has been repossessed you will have three business days to clear your balance and get your vehicle back, because the law requires your lender hold the car for that amount of time. In addition to paying back the loan amount and any related charges, you will also have to pay for the cost of repossession, which could include towing and storage costs, and any repairs that may have been made in order to make the car operable.

No Additional Fees

Once your vehicle is sold the proceeds go towards paying off your debt. If it sells for less than what you owe, you will no longer be liable for the balance. (If you owe $2,000 and your car sells for $1,500, your lender cannot seek to recover the remaining $500.) On the other hand, if there is a surplus after your vehicle is sold you may see some of the proceeds of the sale. If your car sells for more than your unpaid loan balance, plus services charges, plus the cost of repossession, and a sales fee of a $100 then your lender shall be required to give you 85% of the remaining funds.

References

“Regulations of Trade, Commerce and Investments” Mississippi Statutes, 2018,
http://www.dbcf.state.ms.us/documents/cons_finance/titlepledgeact2005.pdf