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Getting a car title loan may be overwhelming, considering there are many lenders to choose from. Furthermore, with the rapidly growing technology, you can expect these options to multiply over time. Some states don’t allow this type of loan, while others have different laws and regulations governing loan providers. To help you avoid unnecessary pitfalls, here are a few tips to get the best title loan.
1. Understand the application and approval procedure
Most Online Title Loans providers have a streamlined application process that takes place entirely online, but others might require verification through a phone call. Generally, this process takes a 20-minute turn-around time, much quicker than a brick-and-mortar bank or office. However, while this can be convenient to many, the fast process means you might gloss over a few factors that may cost you later. Always double-check the loan terms and payment options.
2. Look for a reputable lender
Title loans are one of the most popular forms of modern lending, and there are many lenders to consider. To make this non-traditional lending less overwhelming, consider how reputable a lender is first. Gather a list of loan providers you are interested in getting a title loan from and do online research about each of them. Go through customer reviews and look for a company with years of title loan experience and flexible lending.
3. Check whether there is an early repayment penalty
Sometimes, paying off your title loan ahead of schedule is a bad idea. If you borrow a title loan with a term of more than 30 days, there is likely to be an early repayment penalty, also known as a prepayment penalty, attached. This means that you may be penalized if you get some money and decide to pay off the loan two months early to save yourself some dollars on interest.
Although no lender wants you to save thousands of dollars on repayments, you have no choice when you sign a contract that states you have to pay that interest no matter what. Always review terms and conditions to see whether there is an early repayment penalty before proceeding with a title loan.
4. Find out which types of cars the lender accepts
Generally, the amount of money you get from a title loan lender depends on your car’s resale value. Loan providers usually have specific guidelines they follow in order to offer you a title loan, such as the year, make and model, mileage, and overall condition of your car. Some lenders will only accept cars manufactured in 2000 and above, while others can accept vehicles manufactured as far back as the 1990s.
5. Consider the repayment options
Before you take out a title loan, inquire about how a lender expects you to repay the loan. This can be either by direct payment or from your paycheck. In addition, you may want to find out exactly how long your title loan will last. Like any other loan, an extended repayment period translates to lower monthly payments.
Endnote
Title loans are a great option when you are facing financial difficulty. These loans offer much more money than a payday or personal loan and are easy to apply. Having the right knowledge about title loans can make the difference between being buried in debt and going through your financial issues comfortably.
