Need Cash? And are you looking for a title loan? Obviously you want to deal with the best lender.. .right?
If you’re interested in taking out a personal loan, but don’t have the credit score necessary to take out a traditional unsecured bank loan, one option that is as your disposal is taking out a car title loan. Car title loans are incredibly popular thanks to the fact that they are quick, easy, and don’t require borrows to have great or even good credit to qualify. But how do they work?
A car title loans works like any secured loan. A secured loan means that the money that you receive for your loan is tied to and based on the value of something that you currently own. That means that in order to qualify for a car title loan, you will have to own a car (ideally in full) and have a lien-free title in your name. When you apply to take out a title loan, car title lenders will evaluate the value of your car. Typically, title loans are worth anywhere between $100 and $5,000 dollars. They can go much higher, however, and many car title lenders advertise loans up to $50,000. The reason why car title loans are usually quite low is because instead of your loan being worth the total value of your car, they are typically worth just 20 to 50 percent of your car’s value.
After your car is evaluated and you qualify for a loan, you will be given a payment term in which you have to pay back your loan in full plus the interest you will accrue over the life of the loan. Title loans typically come with very high interest rates with annual percentage rates going as high as 300%.
If it hasn’t already occurred to you, another thing to be aware of when it comes to car title loans is that if you are unable to pay it back within the agreed upon payment term and default on your loan, your lender has the option to repossess your car. In fact, a fairly substantial percentage – around 1 in 5 – of title loan borrowers end up seeing their car get repossessed.
Avoiding that unhappy outcome of taking out a car title loan depends both on how responsible you are as a borrower, and how your car title lender operates. So, how do you find the best car title lenders and car title loans for you? It is, of course, impossible to know for sure, but there are a few things to keep an eye out for as you being your search for the company you want to borrow from.
Continue reading to find out what they are.
A good place to start not just for a car title lender, but for any company that you are considering borrowing money from, is to find out how long they have been in business. When you are looking for car title lenders that you can trust to give you a fair loan, a fair rate, and fair terms, it is best to search for companies that have logged many years of experience.
This comes in handy not only because you will be able to do more research into them, but also because if you are like most people who are looking to take out a car title loan, you have never done it before. If you are in the dark when it comes to these loans, it is helpful to have someone who can balance out your lack of experience with quite a bit of knowledge.
On top of all that, a long-running business is also a great sign that they are not only good at their jobs, but good at treating customers right. Otherwise, no one would want to work with them!
At the end of the day, this might very likely be the important factor when it comes to any loan, not just car title lenders. Even if you are working with the most experienced company in the industry, if their interest rates are far too high, it may be wise to decide to borrow from a lender with more forgiving rates.
The average interest rate in car title loans is around 25%. That means that if you have to extend your title loan across an entire a year, you will be looking at an annual percentage rate of 300 percent. That is already very high, so if you can get anywhere lower, you should really consider it.
The interest rate of your car title loan will dictate how much your loan will cost you and it is basically the fee that you are paying to take out your loan in the first place. Just one percentage point in either direction can end of saving or costing your hundreds or thousands of dollars depending on the value of your loan and how long your payment term is. So make sure you do your due diligence and find out the rates before you sign anything.
This is another thing to feel out as you begin narrowing down which companies you would like to work with and borrow from.
A car title lender should be willing to make things work for you throughout the process of your loan and should not seem dead set on terms that will make it hard for you to pay back your loan. If you are sensing pushback early on, it may be a sign that you should opt to work with a different lender.
In the end, the ideal outcome of a car title loan should be for you to take out your loan and pay it back in full by the end of your payment term. If that means extending the term, or perhaps even partially lowering the interest rate, your lender should at least seem willing to consider it.
Payment can be made in cash or directly into your bank account.
This is a fantastic way to get a feel for how past customers feel about the car title lenders you are considering borrowing from. The way they feel about their experience will likely help you predict who you will feel about yours.
The best lenders will often feature testimonials right on their site as proof of positive past loans they have offered. If they do not offer testimonials on their site, you should be able to find them easily by going to one of the many business review sites online. Beyond that, if you find yourself having trouble finding testimonials of any kind online, it might be a sign that either the company is too new to be truly trustworthy, or that they are hiding something about their business dealings that you would be wise to stay away from. Check how they value vehicles, do they use Kelly Blue Book? Also can you apply online or where are their locations. And How much will they lend you? Is it $2500 or $5,000 or $10,000. Find out all that info before you get the cash you need to pay for your emergency. No matter what you need the cash for be it mortgage payments, legal fees, bills, rent, repair bills for your car consider a title loan rather than a payday advance loan and save on fees.
How to Apply
Ok so if you’ve decided to apply for a title loan, check out our page that lists lenders.