We’ve all been in situations where we’ve needed money. Whether you’ve needed money to finance a business, go to school, or cover another major expense everyone knows what it’s like to need money and to need it fast.
Car title loans are a fast and easy way to get a small loan. You give the lender the title to your car, and in exchange, they give you a loan. These loans are usually paid back in a short amount of time, on average about 30 days.
Title loans are usually easier to get than traditional loans, but there are some things you need to know if you want to get the best deal.
Make sure you have a car that qualifies
Lenders that specialize in title loans aren’t going to take any car off the street. They’re going to want a car that’s in good condition and slightly newer (think 2000 model and above).
Vehicle mileage can also play a considerable role in determining your loan amount. Cars with 100k+ miles on them may not get as much money as cars with lower miles.
Ask about rollover rates
In a perfect world you’d be able to pay off title loans within the initial term, but unfortunately, things can happen.
If something happens and you aren’t able to quickly pay back the loan, you’re going to want to have ample roll-over time.
Roll over time allows you to simply pay the interest on the loan, but not the regular payment amount.
Some lenders have unlimited roll-over time. While that may seem appealing, it’s important to remember that you’ll acquire a lot of interest if you do several rollovers.
You don’t need to indefinitely roll over, but you want to make sure that you’ll have the ability to do it once or twice in case something comes up.
Know about fees and add-ons
The lender is going to have the title to your car, and they may require some additional payments to keep their investment safe.
Some title loans have fees attached for extended auto insurance coverage, roadside assistance, or even life insurance.
Be sure to ask about extra fees and add-ons before you sign. A lot of seemingly affordable loans have become expensive after extra money is tacked on to the price.
Ask about penalties
Many lenders have penalties attached to their title loans that you need to know about before you agree to anything.
Some may have a penalty attached to early repayment, others could have stipulations about taking extra time to repay loans.
Before you sign on the dotted line, make sure you have a full knowledge of any penalties the loan may have.
Check with the state
Before you work with any title loan lender, make sure that they’re licensed to operate in your state.
Be especially careful with lenders from outside of your state. Check to make sure that they’re licensed in their home state and that it’s okay to do business with them.
Taking out a title loan for the first time can seem daunting, but as long as you do your research you’ll be fine.
Take time to fully understand anything that you sign. Also, never forget that you can always take your business elsewhere.