Auto Equity Loans Online

The short-term lending industry has worked hard to create lending options that work for customers who need a short-term financial fix instead of a long-term headache. Such as auto equity loans, which actually grant borrowers a loan based on how much their vehicle is worth. These loans have quite a few benefits, not the least of which is the ability to ease a brief financial downturn and shore up the household budget. By understanding how these loans work in general, and how each state regulates auto equity loans online and off, borrowers looking to solve their financial worries can take the first step toward peace of mind.

So, What Exactly is Auto Equity?

Most people have probably heard the term "equity" used in reference to a home, which increases in value over time and creates additional wealth for buyers. The equity in a home is based on the difference between the home's current value and the amount of money left to be repaid to the mortgage lender.

Auto equity is a similar concept. Instead of being calculated based on a car's value and how much is still owed on that vehicle to a lender, auto equity is calculated simply by looking at the fair market vehicle of a car that has already been fully paid off. With an understanding of equity, it's easy to understand how an auto equity loan works.

Auto Equity Loans Online: How These Unique Loans Work

Auto equity loans are one of the most popular short-term lending options available to today's borrowers. They offer fast application and approval processes, large maximum limits, and a far easier chance at approval. This is because of a few key factors that are unique to auto equity loans:

Collateral: Auto equity loans require collateral in the form of a fully owned vehicle and its associated title. By using collateral, lenders are able to reduce the risk associated with issuing a loan. They can therefore offer loan approval to a far greater share of applicants.
Predictable Loan Amounts: Loan amounts are based on the fair market value of the car and, in many states, dictate the maximum amount of money that can be loaned to a borrower upon approval. This makes it easy to apply for a loan and know exactly how much money will be granted by the lender.
Quick Approval and Payment: Most equity loans are offered online, with fully electronic applications that can be reviewed and approved within minutes. The typical loan is also funded and transferred into the borrower's' bank account electronically within one business day.
Short Repayment Periods: Most people want to repay a loan quickly and forget about it. In many cases, title loans can be fully repaid in as little as 30 days. In many states, however, borrowers can extend their repayment term up to a full year if they need more time to repay the balance.

How to Apply for Auto Equity Loans Online

The first step toward getting an auto equity loan is to submit the official application online. This application is actually very simple and requires only a few basic details. Potential borrowers will need to have the following information available as they fill in the required fields of the online application:

Full name
Address and zip code
Primary phone number
Vehicle make, model and year
Current vehicle mileage
Fully owned vehicle title free of any liens

It's important to remember that auto equity loans are based on the fair market value of the vehicle being used as collateral. For this reason, borrowers must submit the most accurate and up-to-date information about their vehicle when applying for auto equity loans online. Furthermore, the vehicle must be fully owned without any liens. That means the car cannot currently be financed and the borrower cannot owe any funds to another car equity loan company.

Next Steps: What Happens After Submitting the Application?

After the application has been submitted electronically, a loan specialist will review the borrower's contact information and vehicle details. They'll use this information to generate an auto equity loan estimate and to determine whether the application will be approved. Once they've made a loan estimate and approval decision, they'll contact the customer at their primary phone number as listed on the electronic application to discuss the loan terms and the funding process. If customers agree to these terms, the loan funds will typically be transmitted to their bank account the following business day.

Once the loan balance has been received, customers move from the application process to the repayment period. In most states, repayment periods range from 30 days to 12 months. This is largely based on the borrower's income, loan amount, and ability to repay, as well as any applicable state regulations.

State-By-State: A Look at Title Regulations Across America

Car equity loans are not legal in all 50 states. Currently, 17 states have legalized these types of equity loans, while customers another four states are able to obtain loans through a loophole in state regulations. In the remaining 29 states, equity loans are typically not legal unless the lender has gotten specific state approval, offers a slightly different product that meets consumers’ short-term needs, or exploits a legal loophole. The states listed below legally offer auto equity loans. The regulations pertaining to these loans are listed underneath each state's name.

Alabama

25 percent monthly interest rate limit
300 percent effective APR limitation
Loans must be paid back within 30 days
Repayment can be extended up to one additional month

Arizona

17 percent monthly interest rate limit
Late payment fee of up to 5 percent
204 percent effective APR limitation
Payments may be extended, deferred, or refinanced

Delaware

No cap on costs or interest rates
Loan term may extend to 180 days
Borrowers must pay at least 10 percent of the principal balance per month
Fully owned title required

Georgia

Effective interest rate cap of 25 percent monthly
Limited to 30-day repayment term
300 percent effective APR limitation
Fully owned title required

Idaho

No cap on monthly or annual interest rates
30-day loan term limitation with the ability to extend repayment
Maximum of three payment term extensions
Notice of 10 days given prior to vehicle repossession for nonpayment
Fully owned title required

Illinois

Maximum loan amount of $4,000 or 50 percent of monthly income
No cap on monthly or APR costs
15-day waiting period between equity loans
No balloon payments permitted
No maximum or minimum repayment period required
Fully owned title required

Mississippi

Maximum loan amount of $2,500
Costs capped at 25 percent per month and 300 percent per year
30-day loan term limit
Ability to extend repayment term in exchange for a 10 percent payment
Fully owned title required

Missouri

$5,000 maximum loan amount
No cap on interest rates or fees
Repayment period must be no less than 30 days
Fully owned title required

Nevada

No cap on loan amount, interest rates, or fees
Maximum of 210-day repayment term

New Hampshire

Maximum loan amount of $10,000
25 percent monthly interest rate cap
300 percent effective APR cap
Maximum of 10-month repayment period

New Mexico

$2,500 cap on loan amount
No cap on monthly or APR rates
Fully owned title required

South Dakota

No cap on loan amount or fees
Maximum of four months to repay loan balance
Fully owned title required

Tennessee

$1,500 maximum loan balance
30-day loan repayment period with up to 3 renewals
264 percent maximum APR
Monthly costs limited to 2 percent of the loan balance
Fully owned title required

Texas

No cap on loan amount or APR charges
10 percent monthly interest rate cap
Maximum of 180 days to repay the loan balance
Fully owned title required

Utah

No cap on loan amount or costs
No cap on repayment term or number of renewals
Fully owned title required

Virginia

Maximum loan balance is 50 percent of vehicle's fair market value
Limit of 22 percent monthly interest rate
264 percent maximum APR
Minimum repayment term of four months
Maximum repayment term of one year
Fully owned title required

Wisconsin

Maximum loan balance is 50 percent of vehicle's fair market value
Maximum repayment term of 6 months
No cap on monthly or APR costs

All Other States: A Look at Loopholes and Laws

In four other states not listed above, including California, Kansas, Louisiana, and South Carolina, equity loans are available through a loophole. In most of these states, borrowers are able to apply for loans that have a higher balance or a longer repayment period. This means that the loans are not "short-term" by definition, and are therefore not regulated under laws that pertain to car equity loans, title loans, and payday loans.

In some states, it's legal for customers to obtain auto equity loans that are offered by another state where the practice is legal, but it's not legal for equity loan companies to operate in that specific state. In states where there is no loophole, the practice has been effectively outlawed due to regulations that enforce low interest rates or low maximum loan amounts. It's important to note that other short-term lending options that don't require collateral, such as payday loans, may still be available in many more states.

Choose a Loan Cheetah Car Equity Loan and Enjoy Financial Peace of Mind

When it comes to fixing a short-term financial headache, few options are as helpful as auto equity loans. These short-term loans have a far higher approval rate than traditional loans from big banks, offer shorter repayment periods, and give customers nearly instant freedom from financial hardship. For this reason, auto equity loans continue to increase in popularity nationwide in each state that has legalized them.

If the time has come to move past financial struggles and tackle a short-term financial hardship, Loan Cheetah is here to help. Our online application process is quick and easy, and our loan specialists will guide customers through every step of the process as they approve the loan. It's time to take the first step toward financial freedom and begin our online loan application right away.