During unexpected emergencies, your savings and emergency fund can help you overcome a financial crisis. However, there are times when they are not enough to pay the unexpected bills or expenses. In times like this, you can take advantage of car title loans.
According to Pew Charitable Trusts, there more than 2 million people in America who use car title loans. They borrow money against the value of their cars and use their car title as collateral. There are minimal requirements in getting one, and the loan process is quick and easy. Thus, it appeals to a lot of people.
Before you get car title loans, you must first consider the security of the platform or the loan provider. You must also understand everything about the loan you’re getting if you don’t want to see yourself swindled and get in trouble with the law. Get the safest car title loan by following the guide below:
One: Ask about the payment process.
First of all, you need to know your payment options. Does the lender prefer cash or a paycheck? It’s necessary that both of you come to an agreement before you sign a contract and hand over your car title. You should also know how many months you’re given to pay the loan. The longer you’re required to pay the loan, the less you will have to pay each month. On the other hand, you might have to pay heavier finance charges.
Two: Review pre-payment penalty charges.
Any smart borrower should aim to pay their title loan the soonest possible time. If you have the money even before your due time, you might be tempted to pay off the loan completely. Doing this will eliminate interest charges that will hit you in the coming months. However, don’t be hasty in doing this. There are some loan firms that will penalize you if you pay off your loan earlier than what you agreed. Remember that the car title loan system gets the profit mainly from the steady interest charges.
Three: Discuss their terms and conditions.
Different lenders have different approval processes and different terms. Before you complete your application, be sure to ask about what they expect from you. Do you have to submit your car for inspection? Can you keep driving your car after you submit your car title to them? Will they need to install a tracking device on your vehicle? What happens if you fail to pay the loan? These important questions should be clearly answered before and not after you make a deal.
Four: Calculate the cost of paying the loan.
When you’re in trouble, and you urgently need money, you are more vulnerable to fraud. You will be tempted to agree to an unfair condition as long as you can get the money quickly and without hassle. However, you don’t have to settle for less. There are honest lending companies that will charge you the best interest rates according to your vehicle here are the tips for buying from a car dealership.
Five: Check the lender’s license.
Last but not the least, make sure that your lender has the license to offer car title loans in your state. If you are in Miami, make sure that the lender meets all the requirements of the state as it may differ from the others. If you find that the lender has not registered in Miami, you should understand that whatever transaction you make is not protected by the state’s laws. When you have disagreements later on, it might be hard to settle them.
Stay on the safe side and be sure to follow the guidelines above before you make a deal with a car title lender.