What You Need to Know About Missouri Title Loan Laws
Missouri title loan laws protect borrowers from unfair practices. While it’s crucial to read the fine print before signing paperwork for a title loan, understanding the laws is equally important. Here are title loan laws in Missouri you should know.
With a title loan, you borrow against the equity in your car. To qualify, you must have paid off any car loan, if applicable, and hold a clean title. When you take out the loan, the lender takes your title. If you fail to repay, the lender takes ownership of your car and gain proceeds from auctioning off the vehicle. If the vehicle sells for more than the money owed, you’ll get the balance.
Know Your Fee and Loan Amount Limits
You should not pay more than $125 for every $500 borrowed. This equates to a maximum interest rate of 300 percent. A title loan cannot exceed $2,500 either.
Title Loan Must Not Require Payment Before 30 Days
In Missouri, a title loan requires a lender to give you at least 30 days to repay your loan. If a lender requires you to repay the loan in less than 30 days, do not agree to the paperwork and notify the state.
Title Loans Must be Renewed if You Ask
If you ask to renew your title loan, the company must agree. However, you need to pay down the principal by at least 10 percent with the third and any subsequent renewals. You cannot take out a brand-new title loan to pay off your original title loan, however.
Title Loans Require You to be of Age and Mental Capacity
You will not be extended a title loan if you’re not 18 years of age. Additionally, Missouri title loan laws prohibit lenders from agreeing to give you a title loan if you are intoxicated.
Read the Fine Print
When you read the fine print, make sure you understand the interest rate and repayment terms. You must be given a truth-in-lending statement to make this easy to understand. The title loan agreement must clearly display the APR, finance charge, payment schedule, and late fees.
Some lenders say they’re extending a title loan when they’re offering another product. The fine print should state that they are following the Missouri Revised Statute 367.500 to 367.533.
If you ever have doubts or questions, do not sign paperwork until the terms are clear. If you suspect your lender is not acting within Missouri title loan laws, contact the state.
