Why Military Members and Their Families are Ineligible for Ohio Car Title Loans?

If you live in the Columbus or Cincinnati area and find yourself having trouble making ends meet this month and no other way to borrow the money you need, you may have already thought about applying for Cincinnati car title loans. These short-term loans are easy to qualify for with no credit check and provide the money necessary to pay bills, fix a car and handle an emergency.

While most people qualify for Ohio car title loans, provided they are over 18 and own their own car with a clean title, not everyone qualifies. There are many reasons you may be denied for Columbus car title loans, but one of the biggest reasons is federal legislation that prevents active duty military members as well as their dependents from taking out a car title loan.

The Military Lending Act of 2007, which is a provision of the National Defense Authorization Act of 2006, made a number of changes to lending practices for U.S. military members. After a Department of Defense report found that 17% of military personnel used payday loans, this legislation required the annual interest rate for military borrowers to be capped at 36%. It also prohibits lenders from securing a loan with a personal check, debit authorization, wage allotment or a title to a car.

This law prohibits the use of a vehicle's title as security for any loan made to service members or their families, and it also prohibits lenders from renewing, refinancing or rolling over credit by using the proceeds of another credit granted by the same lender. What this means is Ohio car title loans are now inaccessible to military members and military families.

Unfortunately, it's not always possible to save up the money you need for an emergency, and friends and family may not always be able to loan you the money you need. Cincinnati car title loans have always been an excellent way to get the cash you need to cover you until next payday, but one of the first questions car title lenders now ask is, "Are you an active member of the military or are you dependent on someone in the military?" If you answer yes, you will probably be denied for a title loan in Ohio and anywhere else.

While this law certainly has great intentions by limiting predatory lending to members of the military, it also puts military families in a tough situation. Bad credit makes it nearly impossible to turn to a loan through any other means, although this law still allows predatory lending. Lenders are still passing through the cracks, overcharging military members with payday loans that have just a slightly different structure but the same high rates.

The truth is, Ohio car title loans have a bad reputation that is undeserved. Many have interest rates below that of a credit card, and they serve an important service, allowing families to avoid late fees on their mortgage or credit cards, pay off debt, put food on the table for their children, avoid disconnected utilities and get their car fixed so they can get to work.

Ohio Lawmakers Eying New Laws Against Ohio Car Title Loans

In 2010, Ohio passed very restrictive laws against payday loans, claiming these high cost loans exploit the vulnerable and poor. According to many lawmakers, Ohio car title loans are just an attempt to operate in a loophole of Ohio's lending laws, loaning money to people under the same terms.

The legislation of 2010 enacted very strict rules on lenders, including a maximum interest of 28% on the APR and a minimum payback term of 31 days. This means payday lenders and lenders who provide Cincinnati car title loans must give you at least a month to pay back your balance, not merely two weeks. Still, lenders are able to use other laws in existence in the state to continue charging effective annual percentage rates over 350%.

While they may seem the same on the surface, Ohio car title loans have a few differences from payday loans. Title loans require the use of a car or vehicle's title as security instead of a paycheck. Borrowers also face having their vehicle repossessed if they can't pay the loan back on time.

While it's easy to vilify car title loans in Ohio, it's also important to remember that they are an important service for many people. Consumers in the state who have no savings and no or bad credit have virtually no other options when an emergency strikes and they need money. No traditional lender or bank will give a personal loan to someone with bad credit, and consumers who don't have money saved up will be placed in a very tough situation if their car breaks down, they need to feed their children or keep the electricity on.

When used responsibly, Cincinnati car title loans can even help consumers save money. Consider this example: you've written a few checks to pay the bills, then you realize you don't have nearly enough cash in your checking account to cover them. What happens when all of those checks clear? You will be facing bounced check fees from your bank of at least $30 each. If you obtain a car title loan for $500 to cover the checks, you're total cost for the loan may be less than $45 and you can pay back the balance on payday, potentially saving yourself over $100 in the process.

Title loans can also be used to avoid late payment fees on utilities and credit cards, as well as further damage to your credit if you miss a payment on the mortgage, student loans or a credit card.

While there are absolutely consequences to defaulting on a title loan, and borrowers should be very careful to borrow only what they need and can afford to repay quickly, this does not mean that the service itself should be outlawed. Doing so would only eliminate a much-needed source of emergency cash for thousands of people throughout Ohio.

Do I Qualify for Ohio Car Title Loans if I'm Unemployed?

It may seem like a stretch qualifying for Ohio car title loans if you don't have any money coming in, but there's a growing number of consumers who are struggling to pay back payday loan and car title loan debt while being unemployed. Joblessness has been a huge concern for a number of years, and many lenders are quick to offer you a fast cash solution, but at what cost? If you're facing high interest rates and the expectation that the loan will be paid back within a month, this leaves you very little room to catch up or get ahead.

While the economy is slowly improving, unemployment rates are still high, including in Ohio. A huge percentage of Americans are still struggling to cover day-to-day expenses like housing, food, gasoline, utilities and more. Traditional lenders like a bank will require a credit check to get the money you need, and you will be disqualified if you don't have good credit. Traditional lenders also require steady monthly income and proof of employment to get you your money.

Can you even qualify for Cincinnati car title loans?

If you're unemployed and struggling to pay for the basic necessities, there's a good chance you can obtain Ohio car title loans. These loans are designed to be short-term and you will use your vehicle as collateral. The maximum amount you can borrow is based on the equity and value of your car, but you need to be very careful.

While you may still get approved for Cincinnati car title loans despite your unemployment, you're putting yourself in a dangerous position. With payday loans, most people can only borrow a few hundred dollars at a time, but many people who are unemployed will still be paying on a previous payday loan while getting a second or third. The same is true for car title loans in Ohio, except the loan amount will probably be much larger and therefore harder to pay off.

If you're considering turning to Ohio car title loans to help you through a phase of unemployment, tread carefully because you risk losing your primary means of transportation and a valuable asset. If you don't pay back the loan, the lender has the right to repossess your car and auction it off. Even if you can afford the monthly payments, you may be saddling yourself down with a short-term debt for a very long period of time, paying a great deal in interest along the way.

Many providers of Columbus car title loans are very understanding and work with borrowers to set up an affordable repayment plan during times of difficulty, but you need to make sure you can afford the monthly payment and have the means to pay off the loan quickly. Because title loans are usually for more money than payday loans, don't forget to borrow only what you can pay back. Don't be tempted into borrowing the maximum amount the lender will allow, but instead determine just how much you absolutely need to minimize interest charges.

This responsibility rests on you, so read all of the terms and conditions of any loan before you sign the paperwork and ask the lender about their policy to find out what you can do if you run into trouble later.

Smart Ways to Use Title Loans in Ohio

According to Car Title Loans of Ohio, title loans have a bad reputation in the United States that isn't necessarily fair. While borrowers do risk losing their vehicle and must pay high interest charges, title loans are risky for lenders as well, and they provide emergency loans to people who cannot obtain a loan from a bank or credit union. 

The lender even points out there are some ways title loans can save borrowers money, and shares three of these methods below. 

A representative from American Car Title Loans explains that most borrowers seem to turn to this loan option to save money by avoiding late payments on other bills. He pointed out that utility companies typically charge both a disconnection and reconnection fee if the service is turned off, as well as late fees. These fees can easily top $100, even if the bill amount is less than $150. 

In this case, consumers can save a substantial amount of money by borrowing just $150 with a title loan for one or two weeks to avoid late fees, utility disconnection and reconnection fees that go with it. The typical interest charges for a loan of this amount is minimal. 

Consumers may also use title loans to put cash in their bank account to cover checks that have been written in the last few days. According to Bankrate.com, the average bounced check fee is more than $27, and this is just the amount the consumer has to pay the bank; the consumer may also be on the hook for another $25 or so to the company that deposited the check. 

Bounced checks have become more frequent thanks to electronic check clearing today, which means banks don't need to take the time to process a physical check but instead use a digital check. Checks can now clear a bank account in hours, not days. 

Consumers who realize they have written checks to local businesses or mailed checks to another lender may obtain a title loan in Ohio and have money in their bank account in under one hour to cover these checks and avoid substantial fees. 

Finally, Car Title Loans points out that some consumers may save money by using a title loan to consolidate debt from credit cards and even a small car loan balance. This will not save every consumer money, as it depends on the interest charges currently being paid to the companies, the difference between the old minimum payments and the new minimum payment and how long they take to pay off the title loan. 

It also comes with risk, as the lender points out. Still, consumers should do the math to see if a title loan can save them money by consolidating several smaller credit card and car loan balances into one new loan. 

American Car Title Loans provides title loans to residents in Ohio. All Car Title Loans serves the entire state of Ohio and specializes in online title loans. Their lending process begins with a short online application, followed by a follow-up phone call for verification and a meeting with a mobile loan agent at a convenient location to complete the loan and deliver the cash same-day. They have four locations, including locations in Columbus, Cleveland and Cincinnati.