Kansas Title Loan Laws
People are funny when it comes to finances. A large majority of folks will do their best to read through contracts, ask questions and research before making financial decisions. However, at the same time, there are huge numbers of folks that don’t know how to research loans, cannot be bothered to learn about interest rates or don’t have the slightest idea how the loan process works. Yet, these are the folks that are eager to put their signature on loan contracts. For example, auto title loans are gaining in popularity, and many people assume they all have the same requirements and loan terms regardless of the lender. Unfortunately, this isn’t necessarily the case. Each lender may have their own requirements and terms, which can be important to borrowers. Some lenders require auto insurance, the keys to your car or proof that you have income. In addition, each lender must follow state regulations where they do business. On the surface, auto title loans may sound like a good deal and they can be if you do your research and take out a loan responsibly. If you are in the market for a small loan, you should learn about title loan requirements, how title loans work, title loan regulations in Kansas and how repossession laws come into play.
What Are Car Title Loans?
In many instances, car title loans have replaced personal loans and lines of credit from traditional banks because they are easier to get. You can obtain title loans from loan stores in just about any city, and there are a number of lenders doing business online. These loans are typically short-term loans, which are secured using the auto title to your vehicle. In order to operate legally in the state of Kansas, title lenders offer title loans as open-end loans and will place a lien against the auto to use as collateral. Liens are removed after the final loan payment has been processed, and paper car titles are returned to borrowers. According to Kansas title loan laws, acceptable vehicles include any device used as transportation on public highways, which could include vehicles like trucks, cars, RVs and motorcycles. Providing collateral to secure the loan helps to assure title lenders of less risk when approving loans. In some situations, lenders are also able to obtain more competitive interest rates because loans are secured.
Why Are Title Loans Gaining in Popularity?
Convenience – Many people do not want to take time off from work to sit in a bank filling out long applications, supplying endless amounts of documentation and waiting weeks to learn whether their loan was approved.
Easy Loan Approval – Most applicants applying for car title loans are rarely turned down. A cash loan is almost guaranteed for all title loan applicants. Credit checks are not a condition of loan approval with most title lenders. Therefore, even those with the worst credit scores can easily be approved for loans.
Fast Cash – People do not want to wait for weeks to receive loan payouts. Most title lenders payout loan funds within 24 hours or less after receiving applications.
Hardship Cases – Since the last recession, many folks are still facing extreme financial problems. Job losses and higher costs of living have made it almost impossible for some folks to make ends meet. When there isn’t enough money to pay all the bills, people miss payments and damage their credit ratings to the point where they can’t get financial aid from traditional loan sources. Often, title loans are the last option for cash to keep a roof over their heads and food on the table.
How Title Lenders Determine Loan Amounts
Loan amounts per customer may vary significantly. They are determined by the market value of your automobile. Typically, older autos rate lower loan amounts. However, newer autos in relatively good shape with fewer miles can qualify for large loan amounts. Most car title lenders rely on Kelly Blue Book to set the base rate of a car’s value. Loan payouts may be as low as a few hundred dollars or thousands. Next, the loan representative looks at your income and your ability to make loan payments. By combining the vehicle’s value and your income, a loan rep is able to come up with a reasonable loan amount that provides you with an affordable repayment amount.
Title Loan Requirements in Kansas
Each title lender may have their own set of title loan requirements in Kansas for car title loans such as the examples listed below. Most lenders require that you are old enough to enter into a contract, own a vehicle, have some sort of income and have no liens against the auto to be used for collateral.
- A vehicle title listing you as the owner.
- Proof of your age with a state identification card or your driver’s license to confirm you are 18 or older.
- The vehicle registration document.
- A clear title showing there are no liens against the auto. Some lenders accept titles if a small amount is still owed on the auto.
- Proof of auto insurance.
- A utility bill to confirm your residency in the state.
- Proof of income or recent paystubs to confirm you have the money to repay your loan amount.
- References. Many title lenders ask for at least two or more references before approving loans.
- A set of car keys to the vehicle used as collateral.
- Vehicle inspection. Some lenders may require you to submit your auto for a quick inspection to verify it meets collateral standards.
Title Loan Laws in Kansas
Many states do not allow title lenders to operate in their state. If states allow title loans, each state may determine their own regulations, which lenders must abide by to conduct business in the state legally. Title loan regulations in Kansas are in place to protect consumer’s rights. According to Kansas title loan laws, lenders operating in the state of Kansas may not require borrowers to submit any additional types of collateral other than the vehicle being used to guarantee the loan.
Loan Agreements
Before approving a loan, title lenders and borrowers are required to draw up a formal loan agreement in print, which must include title loan regulations in Kansas. Loan agreements must include the following information:
- The full name of the borrower, Social Security number, physical description, birth date, and address.
- The identification number of the auto used as collateral and the license plate number.
- A written description of the vehicle.
- Lenders must note the identification number and the name of the issuing agency.
- The name and the address of the title loan office.
- The state bank commissioner’s name, address and telephone number for consumer complaints and questions.
- The date when the contract is signed and executed.
- A statement defining the borrower’s right to cancel the contract within two business days of the execution of the contract.
Kansas Title Loan Repossession Laws
Vehicles can be repossessed in Kansas if you used your auto as collateral for a legal transaction such as a car title loan and fail to meet the terms of the loan agreement. Most title lenders include a statement in their loan agreements about repossessing vehicles if you should fail to make your payments. Kansas title loan repossession laws state that repo agents may not use force or violence to repossess vehicles. Repossession agencies or agents are not required to provide notification before taking your vehicle. Lending companies in Kansas are not required to have a court hearing to have autos repossessed. Kansas title loan repossession laws require lenders to notify borrowers by mail after vehicles are repossessed to give them the option to satisfy the outstanding amount due on the loan. Repossession laws allow lenders to sell repossessed vehicles at auctions. Lenders are responsible for notifying borrowers of the sales amount received at auction and the current balance amount on their loan. If the auction price received is not enough to satisfy the loan costs, lenders can legally collect the shortage from loan customers.
Before Taking out a Loan
Car title loans may require less documentation and are easier to get than other types of traditional loans. However, by signing a contract, you are still responsible for repaying the loan amount. Title loans may seem like an easy solution to financial problems at the time, but you are still responsible for paying back the principal, fees and interest. Potential borrowers considering a title loan should take the time to read the terms of their legal agreement. Make sure you feel comfortable with repaying the loan by the due date. It is not unusual for some borrowers to get into financial difficulties with car title loans because they fail to make their payments.
Title Loan Applications
To attract as many potential borrowers and make the loan process as simple as possible, title lenders keep loan applications to a minimum. Most applications only require a small amount of contact and vehicle information to begin the loan process. The majority of title lenders do not charge for loan applications. If you are interested in applying for a title loan, you may need the following information:
- Your full name, home zip code, telephone number or an email address.
- The age, make, model and body style of your auto. Lenders usually require a vehicle mileage estimate for determining loan amounts.
- Some lenders may ask for your vehicle identification number (VIN) to run a quick check.
How the Title Loan Process Works
The Application – Unlike banks, which have long applications, title loan applications are short and easy to fill out. Loan representatives usually ask a few questions about your finances and the car you want to use as collateral. If you have the necessary documents and are eligible for a loan, you will be approved quickly.
Title Loan Advantages
No credit checks. Fast loan funds in 24 hours or less. No early payoff fees or charges. Title loan advantages may appeal to those who have poor credit, no credit or other financial problems. Borrowers with assets such as cars that have enough equity in them to secure a loan can benefit from auto title loans when other lenders would turn them away.
Disadvantages of Title Loans
Some lenders may impound your vehicle during the loan term. This can be a considerable disadvantage if you have no other form of transportation. Additionally, if you fail to repay the loan, you risk losing your vehicle permanently. Title loan borrowers may face higher interest rates than those provided by traditional loan sources.
