Title loans in the state of Idaho are regulated by the Idaho Title Loan Act. Like other states, title loans in Idaho are secured short term loans based on an asset, in most cases a personal vehicle or car. The loan is not based on credit and hence the credit score or history of a borrower is not one of the criteria. The loan amount is determined by the market value of the car or vehicle. Since the car serves as the collateral, the loan amount cannot exceed its resale value. There are seventeen states in the country that have high annual percentage rates or interests on title loans, including Idaho, Alabama, Delaware, Arizona, Nevada and Georgia.
Introduction to Idaho Title Loan Laws
As stated on titlelo.com, all lenders offering title loans must be registered and licensed as per the Idaho Credit Code. Any lender who is not licensed cannot operate legally and any title loan offered by such a business or individual will be deemed forfeited. Borrowers don’t have to pay back such a loan, neither the interest nor any other charges. Unlicensed lenders cannot secure the title of a vehicle and cannot take possession of the car used as collateral.
All title loans in the state have a repayment term of thirty days. This is the maximum number of days or the longest term of repayment as mandated by the law. The repayment term could be shorter. In the event a borrower is unable to repay the full principal of the loan amount with the accrued interest and any other charges by the thirtieth day, the repayment term can be renewed. Such renewals are permitted as long as the borrower repays at least one tenth of the principal loan amount and accrued interest in the subsequent thirty days period. The subsequent interests as further renewals are approved would be calculated on the remaining principal and not the original loan amount.
Lenders are required to collect all relevant information from a prospective borrower. The vehicle details required include the model, make and year, vehicle identification number or VIN and license plate number. A borrower should provide their full name and residential address, date of birth and the original title of the vehicle. The loan agreement should have the date when the proposition has been executed, the date of maturity of the loan which is the end of the repayment term and that can be a maximum of thirty days at the outset, the full name and business address of the lender along with specific terms that govern the execution of the loan and its subsequent repayment and renewals.
Idaho does not have any caps on the interest or annual percentage rate. Any lender is free to charge as much interest or fees as they want. It is up to the borrowers to find the most reasonable rates of interest and other charges. Lenders are however required to make the consumers or borrowers aware of the fact that title loans are short term loans for temporary financial problems and that they are a high interest proposition.
Term Limits & Renewals in Idaho
All title loans in Idaho can be renewed at the end of the first thirty days. This renewal is automated unless a borrower has repaid the principal loan amount along with the associated charges or has already surrendered the car. The law is lenient for the first two renewals but it lays out obligatory terms applicable from the third renewal. Borrowers failing to repay the loan with interest at the end of the third term will need to pay at least a tenth of the original principal with pending fees to subsequently renew the repayment term for another period of thirty days. The lender will reduce the loan amount by a tenth or the amount a borrower has repaid in a renewed period and apply interest on the remaining amount for the subsequent renewed term.
All renewals must be executed in writing. Lenders must provide a notice within a fortnight when a term has been renewed automatically. The notice can be sent by mail or delivered in person. Borrowers can cancel any title loan they have signed up for within one business day from the loan being approved and even if it is disbursed. The borrower simply needs to return the check or give back the cash at the office wherefrom the loan was approved or disbursed.
Seizure and Repossession of Vehicles in Idaho
All lenders have the right to seize and repossess the vehicle if a borrower fails to repay the loan with the accrued interest by the end of the last renewed term. There is no need for lenders to inform the borrowers of such seizure and repossession. However, all lenders need to send a Notice to Cure Default. This notice explains how a borrower can repay the loan and get to keep the car. The lender should provide ten days to the borrower to repay the loan and reclaim the title.
Lenders can sell the car or vehicle to a dealer. They can also sell the vehicle at an auction. The proceeds from such a sale are used to pay for the loan and all costs involved in seizing the vehicle, including towing, selling and legal fees as charged by an attorney. If the proceeds don’t pay for the unpaid loan and interest, the borrower is still legally obligated to repay the difference. If the proceeds exceed what is owed, lenders must return the surplus to borrowers.