Car title loans have been around for years. No one knows when they first offered or which state was first to offer online loans. We can say for sure though that California is at the top when it comes to loans provided and total lenders. We can think of many reasons for why this is. First off, California is the largest state in the country. This is the most obvious reason for the huge amount of loans underwritten. It’s why this state funds the most mortgage loans payday loans, etc. There’s no other state with the amount of people and the amount of lenders. Getting beyond that obvious reason, we can think of other factors in play. Here’s a breakdown of the most likely reasons why we lead the nation in title loan companies.
There are a few things to consider when someone goes to use their pink slip as collateral for a loan. First, they need to know if their state allows this type of financing. Did you know a handful of states bans short term loans and vehicle equity financing all together? Another group of states don’t outright ban title loans. But they have rather strict regulations in place that make it difficult for many companies. Take a state like South Carolina. It’s a large city with a large population. They allow most payday loans, but have regulations that control or limit what title loan companies can offer. This means that most residents are going to look to other sources of funding. One of these rules covers the length that a lender can extend a loan for. In some states the loan term is for months or even years. In California the amount of months you can take out an online loan will vary. It’s likely we’ll see further changes as statewide laws are implemented which intend to curb the interest rates of title and payday loans. Other people may simply apply with a lender in a neighborhood state. California does not have many regulations on the book that would otherwise limit lending terms. Most responsible companies will only provide terms that work for both parties. But consumers need to be on the lookout for rogue lenders that are not licensed in CA. You also need to consider if there are any specific city or municipal restrictions on the books. Los Angeles, being California’s largest metro area has had many discussions in the past on limiting what car title lenders can charge.
Another factor to consider is why these loans are so popular is the fact that California is a state associated with car culture. Going back decades, we’ve all seen the movies and shows that glamorize vehicle usage. Even the numbers speak for themselves when looking at total applications submitted and total loans. More residents of California own vehicles than any other state, and it’s not even close. That means there will be more opportunities for applicants to use their pink slip as collateral when seeking short term funding. Contrast that with a state like New York or New Jersey. These states have a large population base, but not as many people own vehicles. Most residents will walk to work and the need for cars is not as obvious. We don’t know of any data or studies that track title loans provided per capita by state, but California has to be up there. It’s a large state with many metro areas. Housing costs are high in our larger cities, and we face an extreme cost of living. Many residents turn to payday loans and cash advances when they need money for an urgent expense. However, we can’t ignore the fact that car title loans are very popular in this state. It will be interesting to see if any new rules or regulations are brought up next year. Any new rules put would limit the number of available title loan offers in California. But as of today there are still hundreds of active online lenders.