In 2020, Check City changed the terms and pricing of our Title Loans for Utah customers. These changes included the same or lower Annual Percentage Rates (APRs)1 than we used to offer for our customers, and we extended loan terms. The reason we decided to make these changes was to improve the quality of the title lending product we offer our customers.
Previous Title Loan Terms and APR1
Prior to 2020, the APR1 was calculated based on the amount borrowed for the loan. These APRs1 ranged from 240% to 120% depending on the amount borrowed. For example, a customer borrowing $1,000 would have a monthly payment of approximately $225.26. All customers had 12 months for their loan term.
APR1 Changes
In 2020, the APR1 was changed to be calculated based on a customer's credit profile. This helped Check City identify customers with better nontraditional credit scores and offer them better pricing. The APR1 is now calculated based on the value of the vehicle, the customer’s credit risk, and their disposable income to establish a title loan limit.
The new APRs1 range from 175% to 120% depending on the customer's credit profile, among other variables. When comparing Check City’s highest APR1 of the previous title loan program with the highest APR1 of the new title loan program, customers can receive up to a 27.08333%2 lower APR1 with the new title loan program. For example, with this new program, a customer borrowing $1,000 would have a monthly payment of approximately $159.60.2
Length of Term Changes
All qualifying loan customers will receive a loan term of 18 months. Customers qualifying for the best APR1 (e.g., 120%) can choose terms of either 18 or 24 months. These extended terms may help customers with more affordable payments. We extended our terms from 12 months to 18/24 months to offer more flexible payment terms. Customers can always pay their loan early with no prepayment penalty.
Payment Option Changes
Due Dates: Title Loan payments will generally be due on the customer’s pay dates. For bi-weekly and semi-monthly paid customers, they can opt to make payments once a month on the anniversary date of the loan.
ACH Option: We now provide customers with the convenient option to have payments automatically come out of their checking account.
1. The Annual Percentage Rate (APR) is the cost of your credit as a yearly rate and will vary depending on the length of your loan. Please see your consumer loan agreement for the Annual Percentage Rate (APR) and other terms applicable to your loan.
2. This example is meant as an illustration only. No promise of rate should be implied by it.
