How do title loans work in New Mexico? | Yendo Credit Card
Yendo
September 13, 2023
How do title loans work in New Mexico?
When in need of prompt financial resources, many consider leveraging the value of their cars through vehicle title loans. Understanding how title loans work in New Mexico can help you make an informed decision regarding your finances and if this is a viable option for you.
Are title loans legal in New Mexico?
Yes, in New Mexico, taking out a title loan against the value of your vehicle is legal. The industry is governed by specific local regulations to safeguard the interests of the borrower (1).
Regulations Governing Title Loans
In New Mexico, the law stipulates several guidelines to regulate title loan practices:
1. Interest Rates: Unlike some other states, New Mexico has capped the maximum interest rate that can be levied by title loan lenders. For a loan amount up to $10,000, the maximum interest rate is fixed at 36% annually (2).
2. Loan Duration and Renewals: Title loans in New Mexico have a minimum term length of 120 days (3).
3. Licensing: Every lender offering title loans in New Mexico must be licensed under the New Mexico Regulation and Licensing Department (4).
4. Repossession Laws: In the case of a loan default, New Mexico law allows the lender to repossess and sell the vehicle (5).
While title loans can assist in tiding over immediate financial crunches, they also carry potential risks including high interest rates and the chance of vehicle repossession. One must fully understand all terms before proceeding. As an alternative, credit card companies that provide credit based on your vehicle's value could be a more feasible option. You can see how Yendo compares here.
Sources
- https://www.nmlegis.gov/Sessions/22%20Regular/final/HB0132.pdf
- https://www.nmlegis.gov/Sessions/22%20Regular/final/HB0132.pdf
- https://www.nmlegis.gov/Sessions/22%20Regular/final/HB0132.pdf
- https://www.nmlegis.gov/Sessions/22%20Regular/final/HB0132.pdf
- https://www.nmlegis.gov/Sessions/22%20Regular/final/HB0132.pdf
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