Virginia Car Title Loans
What is a Virginia car title loan? A car title loan is a short term, high interest loan secured by the borrower’s car title as collateral. If the borrower defaults on the loan, the car title lender has the right to repossess and sell the vehicle. Nearly 150,000 Virginia households reported using an auto title loan last year.
How does a car title loan work? To receive an auto title loan, borrowers are required to provide:
- a driver’s license or photo identification,
- a clear vehicle title, the car (to be inspected), and
- proof of income.
Title loans made to Virginia residents may range from a minimum term of four months to a maximum loan term of one year.
The borrower remains sole owner of the car until the point at which the car is legally repossessed.
The loan issued can be no more than half of the market value of the car.
Virginia title loans must have a clear due date and repayment must be in substantially equal monthly installments of principle and interest Interest rates on loans are capped at:
- 22% per month (264% APR) for that portion of the loan under $700
- 18% per month (216% APR) for that portion of the loan between $700 and $1400
- 15% per month (180% APR) for that portion of the loan over $1400
Virginia Car Title Lenders are prohibited from:
- Making more than one loan at a time per borrower
- Refinancing, renewing or rolling over loans
- Electronically debiting of borrower’s deposit account
- Making loans to members of the military or their direct dependents
Always consult your legal counsel to make certain that you have the latest Virginia car title loan laws, fees, compliance and licensing information