As with most other legal and financial transactions, when getting a car title loan you have to consider what you are getting into. Having full knowledge of terms of the agreement, other people’s experiences with car title loans (both good and bad) will help you keep realistic expectations.
Many people think that car title loans are an outright bad facility that states should ban, while others believe that it is important for the choice to be available to those who want it. Either way, knowing what your options are and how they can impact you is very important.
Governments have tried to “protect” consumers from scammers in varying degrees. Some governments ban car title loans out rightly while others have seen fit to put in place rules to govern what car title lenders can and cannot do. For example, car title loans in Cupertino are legal while in Denver, the state prohibits car title loans.
Below are 5 considerations that you should make when seeking to get a car title loan.
What is the interest rate?
When getting a car title loan you need to consider what the interest rate on the loan is. You will find that different car title loan companies offer different interest rates. The interest rates usually range from around 80% to over 300% per year pro rated to a monthly basis.
As long as you have done thorough due diligence on the company that you see is the best fit for you, you obviously want to choose a car title loan that offers the least interest rate.
Look for different choices
For you to get the best terms from car title loan companies, you will need to do thorough research on what your available choices are. It will not be in your interest to choose the first car title company that you come across. More choice means that you can be more confident about getting the best terms.
Set aside some of the loan money
As you get the car title loan, consider how much cash you can get on your car. Some car title companies may offer you more cash on your car than others may.
It will be good to get slightly more than you require so that you can cushion your initial monthly payments in case you need to and have some reserve for a rainy day.
Thoroughly read through the details of the contract
As you choose a car title loan company to transact with, make sure that you go through all the terms in the contract and understand everything well. If you don’t understand anything in the loan agreement, ask for professional help.
Know what you are getting into
Read reviews (both good and bad) and research thoroughly on what other people’s experiences with the car title loans are. The more you know the less the surprises you will get when things don’t go according to plan.
If you are thorough about doing your due diligence when getting a car title loan, you should be able to get a good car title loan company to deal with successfully.