Explore state regulations for these short-term loans and find a reputable lender.
Unfortunately, these secured short-term loans aren’t heavily regulated in California, leading to high fees and APRs that can be in the triple digits. However, new laws in the pipeline are designed to cut down on exorbitant fees in the future.
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Compare auto title loan options in California
Where can I get an auto title loan in California?
Auto title loans are available at stores across California, from major cities like Los Angeles and San Francisco to smaller towns scattered throughout the state. Many lenders allow you for applying and preapproval online, which speeds up the process and keeps you from wasting time on a loan you might not qualify for.
Still, because lenders use your car as collateral to secure the loan, you’re ultimately required to visit a physical storefront to have your car inspected for its value in case you default. You’ll also sign off on the loan with an in-office rep.
Title loan locations in California
Online auto title loans in California
Many lenders offer online preapproval forms you fill out to see how much you might be able to borrow based on your income, vehicle and other personal information.
Applications vary by provider, but you can expect to follow general steps when applying online:
- Read over your options and compare lenders.
- Click Go to Site to start an application.
- Complete the application with your personal and financial information.
- Wait for preapproved for an auto title loan.
- Set an appointment for the lender to inspect your car.
- Visit the nearest storefront to have your car inspected and complete your application.
When you apply online, check the lender’s page for a secure “https” URL and notification that it abides by California state law.
What are the auto title loan laws in California?
Few regulations apply to auto title loans in California but include:
- Caps on interest and fees.
– Loans of up to $2,500 — interest rates must fall between 12% and 30% a year, and administrative fees are limited to either $50 or 5% of the principal, whichever is less.
– For loans of $2,500 or more — there’s no cap on how much interest you might pay. Administrative fees can be as high as $75 for loans of $2,500 to $4,999, with no fee caps for loans of $5,000 or more.
- Late fees. If you’re late on a payment, lenders can charge a fee of $10 for the first 10 days and $15 for each day after.
- Repossession. Your lender can repossess your vehicle if you’re late on a payment by just one day or there’s a breach in your contract. Carefully read the terms of your loan to ensure you know exactly what’s expected of you.
Because interest rates aren’t capped for auto loans of $2,500 or more, you’ll won’t find many lenders offering auto title loans under this amount.
Keep an eye out for new laws.
In August 2018, California put for a bill to modify the state’s Financial Code Sections 22202 and 22328.5. This change would prevent a lender from charging fees of more than 3% a month on the unpaid principal of a title loan.
It would also change the definition of title loan. Current law doesn’t state a specific loan amount, whereas the change would consider loans with principals of more than $2,500 title loans.
Read about the changes on the California Legislative Information website.
Auto title loan requirements in California
California law doesn’t outline specific borrower or vehicle requirements for its auto title loans. However, you’ll need to meet basic eligibility criteria that includes:
- Ownership of a lien-free car title.
- Government-issued ID, such as a driver’s license or passport.
- At least 18 years old.
Lenders may also require other factors to qualify, like proof of a minimum income.
Alternatives to consider before taking out a title loan
Loan regulations are looser in California than in other states, making many types of loans permitted under the state law. The downside is that title loans in California can be high-cost and risky. The upside is that you have other options for short-term cash.
You could get an installment loan that comes with similar repayment periods but without the risk of having your car seized. Another option is a payday alternative loan (PAL) from a credit union — these small-dollar loans are designed to give more options to borrowers with lower credit scores. You may also want to look into local resources in California that could provide alternative solutions to short-term loans.
An auto title loan can be useful if you have bad credit and need to pay unexpected bills. However, because of California’s lax regulations, they can quickly become more expensive than you can afford. Read the terms of your loan carefully, and borrow only what you need.
Frequently asked questions
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