Facing a sudden financial shortfall can be a challenging experience, leaving many individuals in Louisiana searching for quick solutions to bridge the gap.
If you live in the Pelican state, own a car, and urgently need some cash to deal with an unexpected medical bill, a sudden expense, or any kind of emergency, you could be eligible for a title loan.
What is a title loan?
A title loan is a type of loan where you use your car's title as collateral to borrow money. When you get a title loan, you temporarily give the lender the title to your car, which means they become the lienholder. In simple terms, it's like borrowing money and letting the lender hold onto your car's ownership papers until you pay back the loan.
Title loans often come with high interest rates and if you're unable to repay the loan, the lender may take possession of your car.
Louisiana title loan requirements
All you need to apply for a title loan with Sound Financial are:
- An Louisiana driver’s license or state-issued ID
- A lien-free vehicle title
- Proof of income
- Proof of residency in Louisiana
- A running vehicle
You must also be at least 18 years old to apply. Active-duty service members of the US Military cannot apply for title loans.
The title loan process
You can apply for a title loan once all your documents are in order. Here’s how it works:
First, you'll have to fill out an online form offering information about yourself and your vehicle. This will let the lender find out where in the state you live and assess if you’re eligible.
The lender will then verify your documents, including proof of residence in Louisiana, income, and lien-free car title registered in the state.
The next step is the inspection of the vehicle. The lender will check the make of your car, as well as its odometer, engine, and exterior to assess how much you can borrow.
The lender will then send you a loan agreement. This document should be checked carefully as it will list all the conditions related to the loan, including a payment schedule, late payment fees, and interest rates, which in the state is capped at 36%.
In Louisiana, loans are processed much quicker than in some other states. Provided steps one to four are carried out on time, the lender will hand over the funds on the same day. If not, they will be transferred on the following business day.
Per the conditions stipulated in your agreement, you will be expected to repay the loan by the due date, which is a minimum of two months in Louisiana.
How title loans are regulated in Louisiana
Title loans in Louisiana are currently regulated under Louisiana Revised Statutes § 9:3572.1 et seq.
The state caps the amount of interest lenders are allowed to charge at 36%. This rate could be lower in some cases, so check out a few options before proceeding.
In Louisiana, the maximum amount you can borrow through a title loan is $50,000, while the minimum is capped at $350. You may repay your loan earlier without penalty, but lenders can charge additional interest if you exceed the two months.
Lenders have the right to repossess a vehicle if you fail to pay them back on time. However, Louisiana title loans have a minimum repayment period of 60 days, so lenders cannot demand repayment earlier than two months.
Cost considerations and title loan alternatives
The cost of a title loan in Louisiana is dependent on your loan amount and your APR. Here are a few examples to help illustrate the true cost of a title loan.
- Example 1: You borrow $500 at an APR of 300% and pay it back in 30 days.
If you took out a $500 loan and paid it back in 30 days, you would pay a total of $625 back to your lender in 1 payment. In this example, you’re paying $125 in finance charges to borrow $500.
- Example 2: You borrow $500 at an APR of 300% and pay it back in 6 months.
If you borrowed $500 and paid it back in 6 months, you would pay a total of $1,016.46 back to your lender in 6 payments of $169.41. In this example, you’re paying $516.46 in finance charges to borrow $500.
Personal installment loans: A better and more affordable way to borrow money with bad credit
While the Louisiana government does offer some protection to the borrower, title loans aren’t suited for every need. Those who need a sum smaller than $350, or are worried about the lack of protection in case of repossession, could look into other options.
One popular alternative is an installment loan, another small consumer loan that isn’t so reliant on credit score. Unlike a title loan, however, you can repay the money you owe in simple and easy-to-manage installments.
Frequently asked questions
Here are some of the most commonly asked questions that we get regarding Louisiana title loans.
Can I qualify for a title loan with bad credit?
Yes! Since your car is put up as collateral, lenders don’t care about your credit score. All you must provide in Louisiana is a lien-free car title to be eligible.
Can I get a title loan completely online with no credit check and no inspection?
Yes! You can secure a title loan online without having to check your credit. Unfortunately, a vehicle inspection is an essential part of the process. The terms of your loan heavily depend on the lender’s assessment of your vehicle's interior and exterior value.
Will I receive the funds from my title loan instantly?
Title loans are generally processed very quickly in Louisiana. You will receive the funds on the same day if you finish the application process before 2 pm.
Do you offer car title loans near me?
Yes! We offer title loans nearby through direct title loan lenders in many cities in Louisiana, including:
- Baton Rouge
- Bossier City
- Lake Charles
- Morgan City
- New Iberia
- New Orleans
- West Monroe