A car title loan is a secured, short-term loan where the borrower uses their car title as collateral. It is a quick and easy source of money if you are going through a financial crisis. All you have to do to get your loan processed is have a car whose value is more than what you are borrowing and transfer vehicle ownership to the lender for the loan period. You can complete the transaction online or at the lender’s physical office.
A loan is a large financial commitment, and with so many lenders in the market, it is your responsibility to carry out due diligence to ensure that you get the best loan deal. Before you fill up that car title loan application form, put these tips into consideration.
Go for a reputable car title lender
The internet has enabled lending companies offering online car title loans, like 5 Star Car Title Loans, to thrive without the need for a physical office. Before engaging a company, do your research and determine if the lender is duly registered to offer title car loans to avoid being scammed. Check out the company’s reviews online or ask for referrals from your friends.
Understand the loan application procedure
Car title loan lenders compete to make the loan application process as fast as possible. Most of them have a 20-minute turn-around time, within which the entire process will be over. However, some lenders will want to verify your information physically at their offices. But the whole process is done online for online car title lenders. Nevertheless, ensure you have all the documents ready before getting started.
While this fast turn-around can be very convenient, it might have you glossing over a few factors that might cost you later. Take your time to go through the loan terms and payment options.
Review the repayment options
The loan’s repayment terms should be clear. Hence, know if you will have some standing order instructions set up with your bank. Also, ask yourself if the deductions will be made from your salary? Or will you repay the company directly? What is the interest rate of your loan? Is this the best you can get from the market? Answering these questions will help you make a wise decision.
The repayment period is also a significant factor since lenders make money off you from the loan interest. The longer the repayment period, the more you will pay as interest. Ask if the lender charges penalties on early lump sum repayments, something that most of them do to cushion themselves against interest loss. It is also important to find out if there are any hidden charges in their terms and conditions.
Review their car acceptance terms
Some lenders have stringent car acceptance terms. Most of them will have a limit on model year, mileage, or even car model. Some will impound your car for the entire length of the loan and only hand it back to you when you have made the final repayment. Opt for a lender that lets you keep your car.
Ensure your car is in good condition
To get the best deal from a car title lender, your car must be in good shape. This is because the lender will base your loan amount on the market value of the vehicle. The market value is calculated based on the car’s mileage, year of manufacture, model, and general condition.
Online lending has revolutionized the finance sector. However, the internet comes with its own set of challenges and risks. Be vigilant so you don’t get overexposed to cybersecurity when you share your personal data and banking details with the lender.