Understanding the Legality of New Jersey Car Title Loans
The legality of car title loans in New Jersey is problematic for the lender because of the interest rates they usually charge. They often violate New Jersey usury laws because they set forth an interest rate cap of 30%, and rates offered by car title lenders are frequently well more than 100%.
Many of their websites do not disclose the APR. The site may have an FAQ page, but a frequent question like "What are your rates?" is not answered. The biggest downside, of course, is that if you do not pay the loan and the usurious interest, you will end up losing your car.
New Jersey Motor Vehicle Commission Lien Enforcement
An interesting question is whether the New Jersey Motor Vehicle Commission would enforce the lien. Should a lender be able to ask for the state's help to collect on a loan that violates the state's law? As a practical matter, the lender would still repossess the car, and ultimately, you would have to go to court to void the lien and get the car back.
The best solution is not to take the loan out in the first place. Cash advances on credit cards are, comparatively speaking, a better alternative in that the rates are under 30% and do not result in the loss of your car if you miss a payment.
Alternative to Car Title Loans
If you are looking for a car title loan to be able to pay the bills, then you are in some serious financial straits. If you are going to these lenders for money not just to pay monthly expenses but to deal with crushing medical bills and credit card balances, perhaps you should consider filing bankruptcy.
If you live in Burlington, Camden, Gloucester, Salem, or Cumberland County, are considering filing bankruptcy, and are ready to take action, then call us at 856-432-4113 or contact us online for a free consultation to discuss your case.
If you have more questions about bankruptcy, then download the free book, Top Questions People Ask About Filing Bankruptcy in New Jersey. If you want more information on how bankruptcy might help you with your divorce, download the free book, Top Questions Divorcing Couples Ask About NJ Bankruptcy.
