Title Loan Laws in Florida

If you're in need of money immediately and you've been considering Miami car title loans, then it's important to understand the Florida title loan laws. The basic process for a title loan is the same in any state – you apply for the loan and give the lender your car title upon approval. The lender has that title until you've repaid what you borrow, and if you default, your car is the collateral that the lender will come after.

States do get to set up their own regulations for title lenders, and Florida is one of the most borrower-friendly states out there. Here's everything you need to know about the states title loan laws.

Interest Rate Limits

In many states, title loan interest rates are ridiculously high. There may not even be any interest rate limits in place. And when it comes to the states with limits, some only set the limit at 25 percent each month, which would come out to a 300-percent annual percentage rate (APR).

Florida doesn't allow this. Instead, it sets much lower title loan interest rate limits, and these limits correlate to the amount of money you borrow. The amount ranges and their interest rate limits are as follows:

• When you receive a title loan for under $2,000, the highest APR the lender can charge is 30 percent.
• When you receive a title loan for $2,000 to $3,000, the highest APR the lender can charge is 24 percent.
• When you receive a title loan for over $3,000, the highest APR the lender can charge is 18 percent.

Term Length

Some states have restrictions on how long or short a title loan term can be. Florida isn't one of them, as this is an area where the state has chosen not to intervene.

Now, to give you an idea of what to expect, title loan terms in Florida are almost always for 30 days. This is true in many other states, as well, except for those with laws requiring longer terms.

At the end of your vehicle title loan's term, the lender will expect your payment. The best way to go here is to pay off your entire title loan amount, which will include the principal and the interest. Not every borrow is financially able to do this, though, and there are also loan extensions available.

On a loan extension, you must pay your interest, but you can just take the principal into a new term. For this new term, you will have another interest charge.

The Repossession Process

The worst-case scenario with a title loan is a default, which is when you don't pay the lender at all, even to set up an extension. The lender will then start the repossession process.

Certain states allow lenders to send the repo man the moment there's a default on a title loan, but this is another area where Florida is different. Here's how the repossession process works in Florida:

1. There's a 30-day waiting period after your missed payment. The lender can't repossess your car during this time.
2. The lender must send you a notice explaining that they plan to repossess the car, and they must let you have a chance to turn over the car on your own.
3. You can either give the car to the lender on your own, or they will repossess it. Either way, they're required to let you take your personal property out of the car first.

You can pay what you owe at any point in time before the repossession to avoid it entirely. If the lender repossesses your car, they must also send you an invoice with what you owe, along with a notice of when and where the sale of the car will be, at least 10 days ahead of the intended sale. You can pay what you owe before the sale or go to the sale yourself to buy back your car.

What Happens After a Car Sale

There are three outcomes if your car is sold – the sale amount was equal to what you owed, the sale amount was less than what you owed or the sale amount was more than what you owed.

If the same amount was equal or less than what you owed on the car title loan, then that concludes your business with the lender. They're not allowed to bill you for any deficiency amount that your car's sale didn't cover.

If your car sold for more than what you owed, then the lender has 30 days to provide you with this surplus amount.

While title loans always have their risks, Florida is undoubtedly one of the best places where you could get one due to its many borrower protections. You'll have a much lower interest rate than you would throughout the rest of the country, and you'll have some leeway if a default occurs. You'll also have ample opportunity to catch up if you miss a payment.