Whether To Take A Car Title Loan Or Not
Car title loans are short-term loans that use the clear title of your car as collateral. Other names that are used to refer to a car title loan are title pledge, pink slip loan, or a title pawn.
One can get a car title loan on the equity of their vehicle and not on the clear title if they don’t have one. One can get this type of loan and payback within a number of days or a month. Car title loans have a higher rate of interest compared to other loans.
Only those who are able to pay back the loans should get this type of loans. Before one gets a car title loan they must fill a loan application form, bring the clear title, submit a photo ID, present the vehicle, show proof of insurance and submit a set of keys to the lender.
Those who apply for car title loans must review the loan terms before they sign for the loan. Before a client takes a loan, the lender must disclose late fees, document fees, processing fees, title charges, liens charges and loan origination fees so that the client is well informed about all the charges that are part of the loan. It is important to clarify with a lender whether a loan has an add-on because it could potentially raise the loan amount to be paid back.
One can apply for a car loan from an online platform or visit a physical storefront that offers car loans. When a car title loan is approved, one must leave their car title with the lender until the loan is paid off. Repayment of these loans can be done through automated repayment systems, personally visiting the storefront with payment or through an online system.
To know where cars are located in case of a repossession, lenders may require a borrower to install a GPS device on the car. Starter interrupt device may be installed on a borrower’s car so that a lender can be able to repossess the car if the borrower is unable to pay back the loan.
People who cannot make payment within the loan period time may get an additional loan which comes with additional fees and interest, to the amount originally borrowed. If one is unable to repay the loan, the lender will repossess their car. Before one decides to take a car title loan, they must carry out good financial planning to determine how they will pay back the loan in good time.