Vehicle Title Loans, also called Pink Slip Loans or Auto Pawn Loans provide consumers with an option to borrow larger cash amounts, for longer periods, than traditional Payday Loans. Unlike unsecured Payroll Cash Advances or Signature Loans, Vehicle Title Loans are backed by the remaining equity in the consumer’s vehicle. Using their car as collateral, consumers can borrow from $1,500 to $25,000 or more, and take up to 24 months to pay it off. In some cases, (auto pawn loans), the vehicle is impounded for the term of the loan to guarantee that the asset is secure if the customer defaults on their obligation.
Hampden Group Holdings, through their subsidiary PrePaid Motors Inc., provides consumers with auto title loans that allow the owner to drive their vehicle while they make monthly loan payments. These mid-term loans, (typically 6 to 24 months), provides consumers with the cash they need without the credit checks and waiting period normally associated with traditional lending programs. For consumers borrowing larger amounts, we installed a Global Positioning System (GPS) and auto disabling technology to aid in the recovery of the vehicle in the event that the customer defaults on the loan.
How does it work?
The consumer fills out an application for a vehicle title loan on-line and our proprietary system uses the information to search several national databases to establish the applicant’s viability for repaying loans and transacting business in an ethical manner. Other information provided by the applicant is also verified, including residence, vehicle ownership, insurance, references, employment and bank account status.
Once the applicant has been approved, they bring their original documents (pink slip) to our offices, sign the loan contract and vehicle transfer forms and their money is deposited into their checking account. For loans that need funding quicker than 24 hours, Hampden Group Holdings optionally offers an ATM card that can be loaded in minutes. Having multiple cash transfer options for the consumer provides a level of service that differentiates Hampden Group Holdings from other companies offering vehicle title loans.
When the loan is due, the total amount of the loan, plus fees, is deducted from the customer’s checking account. The consumer also has the option to extend, or make a partial payment, on the loan for an additional fee. When the loan is repaid in full, the consumer can request a new loan and the process repeats itself.
What do we charge for this service?
The finance charges associated with vehicle title loans are directly related to how much is borrowed, and the term of the loan, (payback period). PrePaid Motors charges 10% per month for vehicle title loans that equates to a 120% Annual Percentage Rate (APR) based on a 12-month loan. Our annual percentage rate for vehicle title loans is significantly less than the maximum rate allowed by law in the State of Arizona.
Other companies offering vehicle title loans typically charge an additional fee to cover vehicle title changes. At PrePaid Motors, there are no hidden fees or additional charges, you only pay interest on the amount borrowed for the term of the loan and there are no penalty charges for paying off the loan early.
