We continue to see many changes to regulations regarding title loans, registration loans, and other payday loans in Arizona. These changes are not unexpected. A few states ban title loans outright, and most payday loans with interest rates over 36% are not allowed in Arizona. So, we should expect more changes over the next few years as this industry evolves. Not only that, but there's always talk on a Federal level about regulating short term loans with a nationwide interest rate cap. Of course, Federal regulations are much more challenging to enact. As of now, there's nothing on the immediate horizon that would impact title loans at the state level in Arizona. Let's get right into what's different and what updates and revisions to title loan laws in Arizona we expect to see over the next few years.
Arizona Title Loan Laws And Rules
Always check that your lender has an active Arizona Department of Financial Institutions license. You can verify this through NMLS, which has a page to check all licensed service providers in Arizona. Once you know your company has a license, you will have that extra peace of mind knowing they will follow the regulations already in place. Arizona is a bit different from other states regarding online loans.
Most traditional payday loan offers with rates over 36% are not allowed in Arizona. However, you can still find Arizona lending products with rates above 36%. These options include installment loans, tribal lending products, and car title loans.
Auto Title Loans Are Legal In The State Of Arizona
We know of many title loan companies that offer loans in this state, and yes, secured loans are currently allowed in Arizona. As always, you can meet with someone at any of the state's retail loan locations. You can apply online with Desert Title Loans and get approval in 15 minutes or less. As the name of our site suggests, we work with customers throughout Arizona who are interested in online title loans and registration loans. Our knowledgeable reps can help answer questions about title loans in Arizona. We can also assist applicants in neighboring states like California and Nevada.
Other Statewide Title Loan Regulations In AZ
The most significant restriction for title loans in Arizona centers around interest rates being capped at 17% per month. This amount is high, but ultimately, the goal is to repay your loan quickly and use a title loan for a financial emergency. Another common restriction in Arizona regarding all types of secured and unsecured loans is that you have 24 hours after being approved to rescind your loan with no penalty. This can be a lifesaver if you find another way to borrow cash, as you won't be charged any interest or fees from your initial application. Lenders are supposed to make it easy for borrowers to follow this "cooling off" policy, and your loan agreement should clearly state the options available to you if you want to rescind your loan.
Remember that with registration loans, a lender may place a lien on your vehicle registration, making it challenging when your car registration becomes due. However, there are restrictions on how much that lender can charge you to remove the lien and how much time you have to get back to current on the payments. As with any other financial transaction, ensure your lender is licensed with the Arizona Department of Financial Institutions. Desert Title Loans does not offer direct loans within the state. Still, the lenders we work with are all subject to the restrictions put in place by the Arizona Department Of Financial Institutions.
Changes To Expect With Car Title Loan Regulations For 2024
In recent years, bills have been discussed in the Arizona State House that attempted to bring back traditional payday loans. We've even seen similar bills that would increase the options for Phoenix title loans. These new types of loans are flex loans and line of credit loans. One example is House Bill 2496, which would have permitted many unsecured loans. These loans would come with interest rates above the current threshold of 36%, which means there's a better chance of getting approved, but your interest rate would be higher.
It's not always an easy sell to bring back secured loans with higher rates. Lenders often say they can't provide online title loans with an interest rate cap of 36%. Since this type of loan is for consumers with bad or no credit, the default rate is very high, and there's a significant risk on their end. Also, the lending environment is ripe for fraud as people try to exploit banks and lenders who provide funds for those who would never qualify with traditional companies.
City & County Regulations For Title Loans in Arizona
Some cities have discussed changing their jurisdiction regulations to limit or control title loan lending. Nothing is final yet, but larger cities like Flagstaff, Tempe, and Mesa have progressed in regulating the title loan industry. We will continue to update this page as we hear more about municipal and state regulatory updates that affect car title loans in the Grand Canyon State. Contact Desert Title Loans at 623-526-5001 to learn more about the lending regulations in AZ and how we can help you find the best loan options.
