With the turbulent times of a global pandemic, restless elections, and complete disruption of normal daily life, many people are facing financial difficulties. Whether your money troubles are short or long term, your car can be just the solution you’re looking for.
If you need money, applying for a personal loan at your bank or financial institution can be a long process that includes signing a lot of forms with fine print that likely involve you selling your soul. Borrowing from family or friends can lead to a lot of messy situations that you are best to avoid.
And, oftentimes, you may need more than what a payday loan can offer. The solution? A car title loan! Car title loans are loans you get by using your car’s title as collateral. With countless car title loan companies out there, here’s what you need to go about it the ‘smart’ way.
What You Need For A Car Title Loan
Before going out and getting a loan, understand the loan’s prerequisites. Firstly, to leverage your car title, you need to have a clear car title and can’t have liens on it. Or you need sizable equity in the car. If you have a lien on your car, it means a third party has a stake in its ownership/value. Car title loans are a secure form of collateral — if you don’t pay the loan the lender takes the title.
For lenders to agree to this, they will want to see that no one, other than the borrower, has a stake in the car. Secondly, understand how much you are going to be able to borrow. The lenders decide the total amount they can lend you based on your car’s market value, but they don’t lend 100% of this figure. They will likely lend you between 25-50% of the going market price. They do this to protect themselves from depreciation as cars can depreciate quite significantly. Check your car’s worth online to estimate what you are likely to get from the lenders.
Save The Trip and Get Your Loan Online
Be smart and shop for your car title loan online. You don’t need to drive from lender to lender to assess your car’s value, negotiate a rate, and sign the paperwork. You can do all of this online and get title loans online with no store visit.
Shopping online is the smartest way to get the best rates and lowest fees and avoid adding to your mileage by driving all around town, burning gas just to get loan terms you can agree to. Not only is it hassle-free, but it is the single fastest way to survey the most lenders possible. Online loans can get you approved, have the contracts signed, and money deposited in your account all from the comfort of your home.
Understand The Fees and Interest Rate
Now we get to the real meat and potatoes of it all. The fees you pay and the interest the lender charges are where many people fall short. Often the advertised rate is a temporary rate that is subject to change upon the first late repayment or a variable rate that fluctuates with market trends. It is crucial to avoid such schemes. Find a fixed-rate plan with an affordable interest that you can be sure to pay off as to not accumulate unnecessary costs.
But the interest rate isn’t everything! Don’t be fooled by a low rate that can be coupled with sneaky hidden fees. Be sure to understand any fees attached to the loan that is separate from the interest. These can add up and be structured in such a manner that you don’t notice them immediately.
Don’t forget to consider repayment term length. You need enough time to pay back the loan without any financial burden, and not too much time as to not incur more interest.
While car title loans can be the perfect solution to your money problems, they can also turn into a nightmare of their own. But if you go about finding the loan companies the smart way, you are sure to get the best deal on your loan possible.
Having the correct understanding of what to expect, surveying and researching all your online borrowing options, and finding the right plan, with accommodating fees and interest, you are bound to get an easy-to-pay-off loan on your car title. Don’t be afraid to negotiate or keep searching for a suitable plan until you find one that fits all your needs.