Some people might not know it but cash lender companies offer car title loans. Read this to learn basic information and other facts, here is the world of car title loans.
What is a Car Title Loan?
Many people think that a car title loan is about a loan to get a car. A car title loan is somewhat the opposite. The idea is that you give your car title to the lender to get your loan. You can give any vehicle title – cars, motorcycles, or trucks – and use it as a bond for your loan. Also, the vehicle that serves as collateral will determine the amount of loan the lender can give you. You are given an amount of money that you should pay within the agreed period time. Usually, you must repay the loan within 30 days or so. They also require you to pay a lender fee for the service they offer for borrowing the money.
It can be an expensive process when it comes to car title loans if you are a negligent borrower. There are added interests or fees upon the transaction. Worse thing that can happen is if you exceed the range time in paying your loan and can’t repay it, the lender can take your vehicle. It’s good to familiarize yourself first with how car title loans work. It is for your responsibility to manage and be in control with your contract. One thing to remember is that you should be a great borrower so that you avoid any problems.
How Do I Apply for a Car Title Loan?
Applying for title loans is very easy. You can look for a reputable lender company on the internet. Choose a lender company that is trusted for years and have high reviews for their customer services. Check how people respond to their services and see that they are a certified title loan direct lender.
You can get pre-approved online or go to the lender company physically. Just fill out the application form and wait for the approval of the contract. Just present your application form with your car, the title of the car, a valid ID and other specific requirements (depending on each company). They may also need a spare key or require you to buy a roadside service plan.
Some companies do not put it in your credit check if you are compliant with your loan. Determining the loan you want and how will you pay for it is a team effort. You and the customer service representative will work as a team and talk about the appraisal and interest rates. In addition, most companies even let you drive your car! The only risk of losing your car is if you fail to repay the loan.
How Much Can I Get From A Title Loan?
The appraisal of the customer service representative determines how much money you can get from a title. But if the approved loan is $2000 dollars and the usual monthly percentage rate is 25%, the amount you owe after 30 days is $ 2,500.
What Happens If I Can’t Repay to the Agreed Time?
Sometimes, you might not be able to pay off your title loan due to some reasons. When this happens, there will be a “rollover” to your loan. This is a term used by lender companies if they want to extend your due date for another 30 days. But in this case, another monthly fee will be added that will increase the amount that you have to repay.
If this rollover is done several times, this can worsen your situation making the fee go really high. Sooner or later, this might be the reason you can’t repay the lender at all.
What Happens If I Cannot Really Pay at All?
This is encountered by some people and it is not very pleasing to hear. If you really cannot pay for the money you borrowed, the lender gets your car. This is called “repossession’. With the lender taking your car and car title, it can be sold and the lender uses the money to pay off your loan.
Don’t let this happen because your car is an important investment. It can be difficult for you to lose your most convenient type of transportation. Going to school, work, or just going to places would be a struggle for you.
Some states have laws that force lenders to pay you the difference between the loan and the sale price if your car is “repossessed”. Other states allow lenders to be in full control and keep the whole amount of the money from the sale.
Some Alternatives Other than Car Title Loans
If you think that applying for a car title loan might not suit you, consider these other choices for you to loan money:
You should consider a small loan from a bank or from a credit union. Check also lender companies that offer car title loans and see their short-term loans options. Some lenders offer short-term loans for a small amount of money giving a due date and considerable interest rates. A cash advance may also be possible on your credit card but it usually has higher interest rates. Just compare all the possible banks and look for the best offering that is suited for you before signing up in any agreements. You don’t want to regret any impulsive decisions.
This might be a good option especially if you’re just considering a car title loan to catch up on your other payments. Practically speaking, a new loan will not help you pay your current bills because the new loan will add to your debt payments. Talk to your creditor and ask other terms in paying the credit. They might offer an extension on your bills if they see you that you are making an attempt to pay. Just make sure that you know if there are other charges involved for this deal to happen.
It may sound old-fashioned but a savings plan can be a great help. Make a realistic budget depending on your daily expenditures, former credits and loans, and your monthly income. Planning strategically is the best way to save some money.
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