Everything to Consider When Choosing a Title Loan Provider
Did you know that car title loans are illegal in some 30 states? There are some very good reasons for this too. One of the most common reasons is that title loans are notorious for throwing people into vicious cycles of debts and potential loss of their only means of transport.
You see, over two million people use their cars or trucks to secure title loans every year, and about 17% of them end up losing their vehicles. Most of the rest continue with the cycle up to 8 times rollover due to the high-interest rates stipulated by the title loan provider. This is the reason why you need to find the best title loan provider if you must take out a title loan.
At times, taking a loan can be a necessity due to various reasons, including illness, layoffs, and other emergencies. Title loans are easier to qualify for compared to other types of loans, so you may find yourself, at one point or another, applying for one.
To ensure you get the best deal possible in the market, here are a few things to consider when choosing a title loan provider.
Scrutinize Their Reputation
If there is something you want to look for in a title loan provider, it’s a good reputation. Make sure you are dealing with a person you can trust by checking out how satisfied their past clients have been.
It’s easy to find out how reputable a person is nowadays because all businesses have gone online. You’ll find a wide array of information on their websites and find customer reviews and testimonials on various review sites such as Yelp and Google.
You can also check them out on social media platforms such as Facebook and Twitter. Check what current and past customers have to say about the company and scrutinize their online reviews, gauging both the positive and negative.
Going through other customers’ experiences with the lender will give you an idea of the kind of relationship you’re going to have with them in the coming weeks or months.
Consider the Interest Rates
Title loan interest rates are by far the most crucial aspect of choosing a title loan provider. Interest rates are why people roll over title loans and why these loans become such a vicious cycle that many people are unable to escape.
Of course, it should come as no shock that the interest rates will be arguably some of the highest in the market. However, there is variation between lenders, and even the smallest margin can make a huge difference.
The best course of action is to shop around and compare several options from different title loan providers. Ask them as many questions as possible to understand the rates and the payment process before you choose the right one. Comparing several options will give you an opportunity to choose the best rates and to ensure you pay less money overall.
Consider the Borrowing Value
While comparing interest rates, it’s essential that you also compare the borrowing value at the same time. The borrowing value refers to how much money you’ll be able to borrow against your car. It’s imperative for you to understand that no title loan provider will give you a loan based on the full value of your car.
Usually, the amount is significantly lower than the full value, so you need to understand how much each loan provider is willing to give you. This is an important aspect to consider, so check your options for loans, and choose the title loan provider giving you the best value for the best interest rates.
Factor in All Hidden Costs
If you have ever encountered any kind of deal that involved hidden costs, then you know the kind of problems you can deal with at the end. You’d be surprised to find so many title loan lenders with hidden costs that come as a surprise for most of the borrowers which is why they usually have to roll over their loan in order to keep up the payments.
Comparing loan costs is a vital aspect of the princess once you find a few potential title loan providers. Dig deeper into the fine print details to find any hidden costs or clauses that could jeopardize the deal. It’s vital for you to read any contract involved without assuming anything.
Scrutinize the title car loan terms and conditions and make sure you understand everything before you sign any papers. If there are things you don’t understand or costs you don’t know about, make it a point to ask questions until everything is clear. Title loans don’t come with protection, such as home title protection so be wary.
Check How Long It’ll Take to Get the Loan
Some title loan providers will take longer than others to approve and issue the loan. There are many types of loans out there, but chances are you may need cash fast if you’re going for a title loan. Some title loan providers can get you the cash very fast and seamlessly.
However, it’s prudent for you to ask so you can be sure. It could get frustrating if you don’t access the loan as quickly as you want, especially if it’s for a medical emergency. This is one of those questions you should ask early on to avoid going through a process that you’ll later abandon halfway.
Find Out Loan Conditions
Apart from the title loan terms and conditions, it’s important for you to find out the conditions and consequences. It’s important that you understand from the word go what will happen in the worst-case scenario. In this case, the worst-case scenario being your failure to repay the loan on time or at all.
While at the moment you may have good intentions towards paying back the loan, you may encounter unexpected circumstances and setbacks that hinder you from fulfilling your obligation. You should inquire what exactly will happen if you fail to make these payments.
You’ll find that some title loan providers offer flexibility and could extend your deadline, but others will be relentless and may repossess your car when you default. This is one of the differences you should compare during your search to make sure you cover all bases.
Inquire How You’ll Get Your Title Back
What’s you get the loan and make full repayments, you will have to repossess your car’s title. Before you sign any documents and agree to take any loan, it’s vital for you to ask the provider how they intend to return your car title. How long will it take for them to return it, and will they send it by mail or in-person?
Inquire How They Intend to Use Your Personal Information
While applying for your car title loan, you’ll realize that some title loan providers may ask for more information than others. The less information a provider asks for, the better because you don’t want your personal information floating around the internet unless it is absolutely necessary.
If they ask for the names and contact information of your relatives or close friends, then it’s possible they will call these people regarding your payments if you default. If they do ask for this information, make sure you get reassurance that those people will not receive calls unless under complete dire circumstances.
Will You Keep the Car?
A lot of title loan providers will allow you to keep using your vehicle even after getting the car title loan. However, avoid making the assumption that all lenders will do this.
Some traditional loan providers will ask you to turn over the vehicle to them and only get it back once you clear the loan. This can be an inconvenience if this is the only car you use for your daily transportation.
Choosing the Right Title Loan Provider
Since you have decided that you need to get a car title loan, make it your mission to do in-depth research to find the best title loan provider in your area. This will ensure that you get your loan seamlessly and make the payments without any problems. It also means you’ll get your title back just as seamlessly once you’re done making the payment.
Do you need more financial advice? Would you like to know more about other different types of loans? Then please take a deeper dive into our blog to find more valuable information.