TITLE LOAN CHANGES ARE ON THE WAY IN 2019
Posted by James Richards on August 14th, 2019
The past calendar year has brought many changes to the car title loan industry. New regulations are in place by the CFPB that affect both payday and pink slip lending. These rules may significantly curtail online lending. There have also been new advances brought forward with an online title loan. We are now seeing more companies come into the fold of providing loans. Over the past few months, 3 new lenders began funding loans in many of the largest states. Let’s break down these changes over the past year and try to forecast if there are any changes on board as we make our way through 2019.
There’s been a lot of talks recently about new laws and regulations that may be put into place to “reign in” the online title loan industry. Many of these regulations were forecast before the recent election results. With the surprise Republican win, there’s no doubt that some of these predictions have reigned in a bit. At one-point analysts were predicting that most online title loans and personal loans would be eliminated altogether. Industry experts felt the restrictions would be so strong. They saw many of the largest auto companies would back out of future lending. Instead, we saw the Government try to curb payday loans, installment loans, and pink slip financing. These restrictions are supposed to limit the number of loans that any one person can have. Even if a lender has competitive rates, they will still need to provide a maximum loan amount. The rules are also in place to limit the amount that any specific online title lender can charge. It remains to be seen if these restrictions will stick. The CFPB is currently in turmoil and we have no way of knowing where things are headed over the next few months. As always, specific states and localities continue to bring on rules to enforce online loans in their locations. Check with your local city or state government sites to get the latest updates on your specific region.
We have begun to see the effect that technology has when it comes to online lending. It seems that car title loans have been a bit behind payday and installment loans. When it comes to efficiency but that seems to be changing. In the past, it could take days and weeks to see approval for an equity loan. The loan application had to be verified in person. This meant there was a large amount of manual work and the paperwork can take hours to review. As long as someone has a clear title without a lien, the process is fast and easy. Additionally, each car requires manual verification and proof of income that needs to show verification. We see many examples where it can take a week to get a vehicle inspection. Remember, many applicants apply online hoping to get money within 24 hours. Unfortunately, it takes much longer than that. You need to line up an inspection and make sure your schedule matches that of the car equity loan company. Another aspect where we see change is the approval process. Whereas it can take days to underwrite a loan application, that time amount is now down to a matter of hours. We can attribute this increase to many reasons. There are now more companies funding online loans. This means they need to compete with each other and many are going to promise quicker approvals and underwriting. Learn more at https://www.thebalance.com/car-title-loans-315534
Like it? Share it!
About the AuthorJames Richards
Joined: July 9th, 2019
Articles Posted: 22
More by this author