Title Loans in Laredo, Texas
Loans fall into two general categories, which are secured and unsecured. The secured loans require the borrower to put up a piece of property to serve as collateral, whereas the unsecured loans don’t. Title loans are obviously in the former category, because they’re secured by your car. While you pay back the loan, the lender only has your car title, not your car.
That can change if you fail to pay, which is a default on the loan. If that happens, the lender can send someone to repossess your car. Once the lender has your car, they can sell it to recover what you owed. Some states require lenders to wait a certain period of time prior to repossessing a car, but Texas allows lenders to do so right when the borrower defaults. The good news is that repossession is rare, and you can avoid it by extending your title loan.
When it comes to title loan laws in Texas, there is no cap on how much you can borrow from a title loan company. That amount will be determined entirely by the lender and the value of your car. The state has an interest rate limit of 10 percent for every title loan, although there can be extra monthly fees besides the interest.
As far as title loan terms go, Texas only has a limit of 180 days for title loan contracts. Since title loans are short-term loans, terms tend to be much shorter than that. In fact, in Texas and most other states, the typical term length of a title loan is 30 days.
Now, what about if you run into a situation where you don’t have the money to pay your title loan back when it’s due? This is when an extension will come into play.
To extend your title loan, you just pay any interest and fees it currently has. You don’t need to pay any of the loan principal, and any unpaid loan principal gets taken into a new term of the same length as the old one. This new term will result in more interest and fees. Even though you end up paying some more money to extend your title loan, it’s still a convenient option, and it certainly beats seeing your car repossessed.
Because of that 180-day title loan term limit in Texas, you can’t extend your loan past 180 days, which would be five extensions on a loan with a 30-day term. Once you hit the limit, you must pay the loan in full.