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How do title loans work in Virginia? | Yendo Credit Card

Cory B

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September 13, 2023

How do title loans work in Virginia?

 In the financial world, there are multiple ways you can secure funds when immediate needs arise. Vehicle title loans are one such way, where your car's value can be leveraged for a quick cash loan. If you're a resident of Virginia and considering taking a title loan, it's essential to understand their legal status, how they work in the state and the rules and regulations that govern them because they often come with high interest rates.

 

Firstly, are title loans legal in Virginia?

Yes, title loans are legal in the state of Virginia, regulated by the Virginia Bureaus of Financial Institutions (1).

 

How do title loans work in Virginia?

The concept behind title loans is quite simple - borrowers can leverage the value of their vehicle as collateral to secure a loan. It's worth noting that the loan amount depends on the car's value and the borrower's ability to repay.

 

What are the associated rules and regulations?

The Virginia General Assembly has set specific regulations that govern title loan transactions to protect consumers: 

1. Loan Limit: The state laws allow lenders to provide a loan amount up to 50% of the market value of the vehicle (2).

2. Maximum Interest Rate: Loan companies are authorized to charge a maximum interest rate of 22% per month on the first $700 borrowed; 18% per month on extra loans ranging from $701 to $1400, and 15% per month on sums above $1400 (2).

3. Loan Term: Lenders can provide title loans for a minimum of 120 days and a maximum of one year. Borrowers have the right to pay their loan off early without a pre-payment penalty (2).

4. Lender License: Any company offering title loans in Virginia has to be properly licensed and registered under the Virginia Bureaus of Financial Institutions (1).

5. Repossession Rules: In the case of failure to repay the loan, the lender has the right to repossess the borrower's vehicle and the vehicle may be sold off at public auction (3).

 Even though title loans can cater to your immediate monetary needs, it's essential to consider the high interests and risk associated with these loans. Alternatives like the Yendo credit card that offer credit based on your vehicle's value, might be better sources of obtaining immediate financial assistance (4).

Yendo - the title loan alternative

Yendo is the first credit card that's backed by your car. So, if you own your car outright, or are making payments on it, you can use it to apply for a credit line of up to $10k. No more sky high title loan rates, no more re-applying if you need access to ongoing funds and a lot more money saved in your pocket. Apply today!

Compare Yendo versus a Title loan

 

Sources

  1. https://scc.virginia.gov/getattachment/441574c2-2fc9-4802-a434-fd62c587045e/mvl_va.pdf
  2. https://scc.virginia.gov/getattachment/441574c2-2fc9-4802-a434-fd62c587045e/mvl_va.pdf
  3. https://scc.virginia.gov/getattachment/441574c2-2fc9-4802-a434-fd62c587045e/mvl_va.pdf
  4. https://www.yendo.com/compare-yendo

 

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