Getting an affordable title car loan requires you to put certain things into consideration. An auto title loan is a simple to acquire loan offered by financial institutions, usually title loan companies or bad credit lenders, to individuals who give out the title of their vehicle as collateral against an outstanding debt.
These loans attract high-interest rates that fall anywhere from 30 percent to 400 percent and at times up to 650 percent. Car title loans are usually short-term and should be paid within a month. If you are unable to repay or renew the loan, you risk losing your vehicle.
Therefore, it is critical to consider the following 5 tips on securing a fantastic deal out of an auto title loan.
1. Do an Extensive Research
Conduct thorough research on various providers of car title loans. Identify at least 5 car loan companies that are like to give you an amazing deal. Take your car, reserve keys, the title of the vehicle, and your income statement to different companies to get an ideal rate. Don’t forget to ask about the requirements for qualifying for the loan. Find out the amount of the loan, the amount of payment you’ll make, and what percentage of the payment would be dedicated to principal repayment.
2. Work with a Reputable and Licensed Lender
Auto title loan lending is among the most popular types of non-traditional lending, and there are tons of options to consider. Ensure the lending company you are going for is not only reputable but also licensed. With so many companies relying on the Internet to grow with no physical location, you should do some homework on where they started. For starters, you might wanna check the 5 Star Car Title Loans website for more details.
3. Know the Available Payment Options
Before taking out an auto loan, ensure you are conversant with how the lender expects you to pay off the loan, either from your income or direct payment. You should also ask about the duration of your title loan. The longer your repayment duration, the lower the monthly payments you need to make. However, NO CREDIT LOANS with longer repayment duration attract higher financial charges per month than those with shorter repayment duration. Thus, you should strive to repay your loan within the shortest possible time.
4. Inquire about Existence of Any Repayment Penalty
As far as car title loans are involved, sometimes it is unwise to pay off your outstanding debt early. If you get a loan with a term, which is over 30 days long, it will most probably attract an early repayment penalty. Lenders are always devising a strategy for making high returns from your transactions with them. As such, they come up with loan packages that will get you to pay off as much interest as possible on the repayment. Making early payments allows you to save yourself a significant amount of money in interest payments that directly minimizes the proceeds that lenders earn from the payment.
5. Know the Online Application and Authorization Process
Certain online title loan companies restrict the application procedure entirely online while other might need further authentication via phone call. The approval procedure may take anywhere from 20 minutes or below to a couple of hours. A quick application and approval help you save time. Remember to inquire from your prospective lender if a visual inspection of your vehicle will be necessary before the release of the loan amount.
For many individuals, car title loans are the best option and sometimes the only choice when faced with a financial problem. They are one of the most appealing lending options, and they provide more money compared to payday cash advances. If you are armed with the basics of car title loans, you can easily begin your search. Follow the 5 tips above to get a good deal.