Title loans are big business in America. Actually, let’s correct that to read huge business, with $3.6 billion in profits earned on the 1.7 million title loans that are taken out each year, adding up to $1.6 billion. Today, we’re going to have a look at Overnight Title Loan and Title Loan Cloud, which are the same company. But they’re not actually title loan providers, as you’ll see.
Title loans are short-term, low-dollar, high-interest loans that are considered to be highly predatory, which means they prey on the very people who are the least able to afford them. To get a title loan, all you need is a government-issued ID and a car that has a lien-free title in your name. You take the car and the title to the lender, who assesses (low-balls) the value of the car and offers you around 25 to 40 percent of what it’s worth. That way, when you default on the loan and they repossess and sell your car, they’ll make a lot more money.
Title Loan Providers Want Your Money. All of it.
Type “car title loan” into your browser a couple of times, and most of the ads that pop up as you go about your normal Internet business will be those which entice you to take out a title loan. The lenders are like those scammers who sell you a trip to Disneyland and then ship you off to a ravaged wasteland where you’re chased by swarms of grasshoppers. These loan can – and often do – lead to a financial apocalypse for those who aren’t prepared – or in any way able – to pay them back, and this is exactly what the lenders are banking on, literally. The more months you spend paying the exorbitant interest because you can’t afford to pay back the principal, the more money they make. That’s why lenders don’t check your credit. That’s why most don’t require any proof of income. And that’s why there’s a two dollar profit to be had for every dollar they lend.
Choosing a Title Lender
The four most important factors to consider when taking out a title loan are the interest rate, fees, extra requirements, and length of the loan.
Interest rates for title loans typically start around 300 percent APR, which means that at the end of one year, a $1,000 title loan will end up costing you a total of $4,000. Although interest rates may be lower than 300 percent, they’re probably more likely to higher.
Fees can add up to an additional hundred dollars or more. Lenders may charge a processing, document, late, or lien fee, and they may even charge you a fee for repossessing your car.
Extra requirements will likely include turning over a spare set of keys, the purchase of a life insurance policy or a roadside assistance plan, and allowing the lender to install a GPS tracking device on your vehicle to make it easier for them to locate after you default on your loan.
The term of a typical title loan is 30 days, but there’s not a lender out there who expects you to – or wants you to – pay it back on time. It’s in the rolling over of the loan’s principle that they make their killing.
Overnight Title Loan and Title Loan Cloud
Now, title lenders advertise heavily on the Internet, and Overnight Title Loan seems to come up a lot. So I headed over to their site, read through the information, and learned that Overnight Title Loan isn’t a lender, but a service that hooks you up with a lender. I thought that was pretty odd, since finding an actual title lender is about as hard as finding a vehicle on any city street.
All you have to do to get your title loan using Overnight Title Loan is fill out a short form with your name, email, phone number, and make, model, and year of your vehicle. Overnight Title Loan will forward the information to your nearest title lender, who will then call you with the details of how much they’ll loan and where you need to go to pick up your money.
So what’s the catch? Well, first of all, Overnight Title Loan is probably working with just one or two lenders who kick back a little finder’s fee for sending you their way. Second of all, in order to submit your information, you are required to check two boxes. The first box is your standard agreement to the terms of use, privacy policy, and nonpayment policy. The second box states, “I hereby consent to receive emails, text messages, and other electronic communications at the telephone and email listed above.” From whom you will receive these texts, emails, and phone calls is unclear, but chances are, your information will be sold to scores of entities, both related and unrelated to title loans. And that’s why I didn’t submit my information. I really wanted to know who Overnight Title Loan is affiliated with, but I didn’t want to know badly enough to start getting flooded with offers for secured credit cards and cheap Viagra.
Overnight Title Loan and its sister “company” Title Loan Cloud are bottom feeders that are trying to make money any way they can. You can’t quote me on this, but through extensive research, I found strong hints that Overnight Title Loan is somehow affiliated with Wilshire Consumer Credit, which is associated with customer reviews that are the stuff of nightmares.
Wilshire Consumer Credit has a Partner Advantage Program whereby a business can set up a website like Overnight Title Loan and Title Loan Cloud to help flood the internet with title loan offers that lead right back to Wilshire. According to Wilshire: “As a partner of Wilshire Consumer Credit you will be able to provide your customers with the cash they need at low rates with affordable monthly payments.”
Top Auto Title Loan Companies
- CashNetUSA allows up to $800 loan amount payable between 8 days to 1 month. They have a fast approval process that can be completed within a day. They also offer payday loans and installment loans.
- Check Into Cash boasts of being in the lending business for more than 25 years now. They allow up to $25,000 for car title loans with an easy application process. You can get your money within the next business day.
- Finova Financial. The maximum offer for car title loans that Finova Financial can allow varies by state. The following factors are also considered:
- Vehicle make
- Vehicle model and year
- Vehicle mileage
But you can guarantee a quick pre-qualification and same-day approval process. You’ll also get easy online and mobile access to their tools and resources.
- LoanMart auto title loans’ max amount also varies by state, vehicle value, and ability to repay. They also offer an emergency credit option with your auto title (up to $2,500) that can be approved within 1 business day.
- NetCredit can approve loan amounts of up to $10,000 within the same day of application, with funds being released within the same business day.
- TitleMax has been in operation for more than 15 years and has since been offering competitive interest rates nationwide. With them, you can be approved for a car (or even a motorcycle) title loan within the same day. They allow up to a $10,000 loan amount with no prepayment penalty.
Don’t Do It!
If you’re considering taking out a title loan, don’t do it until you’ve exhausted every other possible avenue for getting emergency funds. And if you still end up needing a title loan, do your own search and find an actual lender that’s as reputable as a title lender can possibly be instead of signing up to receive electronic junk messages through a third-party service that has nothing to with actual title loans.Drive-Safely.net has your back, and we’re working on a long list of title lenders that we’ll review for you. This first review should serve to steer you away from any type of third-party entity that offers to find a title lender on your behalf.