Title loans have become very popular for people who need quick emergency cash, title loans generally don’t worry about your credit score.
Getting quick cash can be easy, but if you choose the wrong auto title lending company, it can be hard to get by, or even worse, you can end up repossessing your vehicle and losing it for good.
But how do you know which company to choose? They all look the same and they all seem to charge extremely high interest rates.
Are title loans even a good option when you need to get some quick cash? Are there any companies you can trust?
If you want to get an auto title loan, it would be best to make sure it is in compliance with the Consumer Financial Protection Bureau (CFPB).
The CFPB was created to protect all consumers from fraudulent lenders and practices, so it is important that they are in compliance and are fully authorized to fund title loans in your state.
Beware of car title loans
If you are considering getting a car title loan, you need to be very careful. When researching it is important to know what the interest rate is, some car title lending companies charge upwards of 300% APR!
Obviously, picking a company that charges three-digit interest is one business you should steer clear of.
Pay attention to 30-day title loan terms, as the term is short, it can be difficult to have the money in time to pay off your title loan.
Be very careful if the title loan company rolls over, this means that after the 30 terms of your title loan are over, and if you haven’t paid it back, the lender will roll over your interest and roll it over for 30 additional days.
Rollover title loans are debt traps because many people can never get out of them because none of the payments go to their principal, everything goes to interest.
Interest-only title loans are also another problem because all of your monthly payments will never reduce your principal balance, you will only pay interest and possibly late fees as well.
No credit check title loan can also be very dangerous because the lender has no idea if you are able to make your monthly payments, it is an irresponsible loan.
Choosing the Right Securities Lending Company
Vehicle repossession with title loan
Repossession of your vehicle with a car title loan can happen, and with lenders charging in the triple digits, it can be difficult to make the monthly payments, or possibly there may be no way to. pay the title loan.
Repossessions happen with 30-day title loans because the problem is that if you don’t have all the money to pay off your title loan, the lender may decide to repossess your car.
Some people who have rollover title loans may never find a way out of this debt trap, and their cars may eventually be repoed.
Some borrowers may never see the end in sight with interest-only title loans, and if the monthly payments are not paid, the borrower will end up losing their car.
Choose securities lending companies wisely
Are there any good car title loan companies out there? How can you find one you can trust? It’s up to you to do your homework, it will pay off, but you have to be very careful.
It can be very difficult to know which car title lending company you can trust. So, if you are considering getting one, here is some information for you that will help you find the right title lending company.
The most important question you can ask yourself when looking for a car title loan is: what is the interest rate you charge?
You should avoid triple-digit title loans, they’re just too expensive, your monthly payments will be difficult to manage, and you’ll be more likely to default on your title loan agreement.
If you search online there are companies that will give title loans at 36% APR because it costs a lot more than a bank loan, but if your credit is poor the bank won’t qualify you.
When shopping for a car title loan, it’s also important to ask how long their terms are, and again, you should avoid short-term 30-title loans.
Some companies will offer you a car title loan term of 24 months to 48 months, with no prepayment penalties, which will keep your monthly payments low and affordable.
It will also be important to ask if there are any early termination fees, if you want to steer clear of companies that charge prepayment penalties, there are options for you at no additional cost.
The lender will use the wholesale value of your vehicle, they could use the Kelly Blue Book or the NADA, to find out your wholesale value and to see if you have enough equity in your car.
Some smaller lenders will only lend you 40% of the wholesale value, and some of the larger companies will lend you up to 85% of the wholesale value.
Online Reputation Title Lending
Choosing a title loan company can be difficult, but if you ask the right questions, you have a much better chance of getting a car title loan that will work for you, and the monthly payments will be manageable within your limits. budget.
It will be important for you to research online for their online reviews. It will be helpful for you to do your discussion after reading their reviews, on Google, Yelp, BBB or any other online review portal.
Remember that all car title loan companies will have negative reviews, or at least they should, but when looking at reviews, look to see if the company has responded to the customer.
If you find that the company never responds to their complaints, you can tell that they don’t care about their customers, so it would be best not to go with them.
If you find that there are a lot of negative reviews, that will be another good sign that the company isn’t right for you.
Choose established securities lending companies
With so many different options available to you, another thing to look for is finding a company that has experience.
Some companies that have only been doing title loans for a few years don’t have the experience or knowledge.
The big title lending companies have collection policies, so they will work with you if you are having trouble making your monthly payments, the new companies might just want to repossess your car because they are getting nervous.
Experience can make a difference, big companies can make adjustments and sometimes defer payments for you.
With smaller title lending companies, the benefits are that you’ll have a more intimate experience and talk to the same person when you’re in the approval process.
With small businesses, they will know your name or know you when they make the collection call reminders.
You won’t get that with the big title lending companies, but you will have more security with the big company because they are more financially secure.
Find the right title lender
There are much cheaper ways to get cash, but they may not be available due to your credit, so it’s important to explore all avenues before choosing to get a car title loan. .
With vehicle title loans, some companies may offer you the money the same day you ask, or they may also offer to get you the money within 24 hours.
Getting same-day financing makes getting a title loan very attractive, but make sure you have an exit strategy, so you always know in the worst-case scenario how you’re going to pay off that loan.
Finding the right title lending company takes some work, but the savings are worth it. In some cases, getting a car title loan is easy, but if you choose the wrong company, it can be very difficult to get out of it.
Use all the resources you have to make the best decision, and if you need to get a car title loan, you have to be very careful and choose the right company.
This article does not necessarily reflect the views of the editors or management of EconoTimes