You can access a car title loan if you have equity or own your vehicle outright. With your vehicle’s title as collateral, these short-term loans offer quick cash, often between $100 and $10,000. Since these loans have the backing of your property, they are considered to be secured loans. This means that the lender can take your vehicle as collateral if the loan isn’t paid back.
Car title loans have high-interest rates and fees, often surpassing 300%. While there are other loan alternatives to consider, they are perfect for those who need fast cash. Below are tips for finding the best title loans.
Best Practices When Applying for Car Title Loans
Consider how reputable the lender is
Despite the recent increase in popularity, a car title loan is a common form of non-traditional lending with endless options. Just like when applying for a business loan, you should consider how reputable the lender is. Fortunately, the internet has made it easy to search for lending companies with a good reputation. A few clicks online, and you will have the company’s history and previous customer reviews.
Do the lender’s terms fit your needs?
Even though you are technically asking for help, you should ensure that the lender’s terms are acceptable and suit your needs. Find a lender who fits your specific needs, including the loanable amount, loan length, fees, and interest rates. Since lenders are there to make profits, ensure that your needs are also met.
How is the application and disbursement process?
Traditional loan lenders require a lot of paperwork to process loans. However, online applications have made it easy to access loans within a short time. With the basic requirements, you can submit your application online or from the lenders’ app. If the loan is approved, your disbursement will be sent as a check, money transfer to your bank, or other preferred methods.
Consider how quickly the potential lender approves your loan. Opt for lenders who disburse payouts for approved loans before the close of business or within one business day.
What repayment options do the lender have?
Modern innovations have introduced a wide array of payment options. To avoid late fees while saving transaction costs, inquire about the various repayment options allowed by the lender. Remember that making late payments can lead to additional fees, and the lender can repossess your car for defaulting the loan. Common repayment options include:
- Mailing payments
- Paying through the lenders’ application
- Using debit, credit, or loyalty cards
- Setting automatic deductions from your checking account
- Paying online from the lender’s website
- Visiting their offices
Endnote
You should understand the risks associated with car title loans before taking one. Familiarize with your preferred lender and ensure that you understand their loan terms and conditions. Additionally, before approaching the lender, use this title loan calculator to estimate the loanable amount you can access. With this estimation, you can decide if the amount is enough to solve your pressing financial needs or not.
