Let's face it. Everyone wants to drive around in a clean, luxury car but not everyone can. However, car title loans give you access to this desire. Due to the high interest rates that title loans have, this may make you want to refinance. However, even if you refinance, the title loan is still going to have a fairly high interest rate and you are still going to have to pay for that hefty price each and every single month that you own that car. This is why it is so important to do your due diligence before purchasing the car. In this article, I am going to be going over some things you should consider when taking out a title loan. I am going to be going over the pros and cons of title loans as well as alternative options.
Normally, title loans are one of the most expensive financing activities you can partake in. The APR on these things is absolutely ridiculous so you will indeed want to look around for a little while to find the best deal. I'd recommend looking into five companies and choosing the best deal that way.
In order to obtain a title loan for a vehicle, you first have to apply for one. You can either do this online or in person depending on who you are going through. When filling it out, you are going to need multiple items like a photo I.D., a valid proof of insurance, and the clear title for the car. This title will be used as collateral when you are paying down the car. When you have paid the car off in full, the clear title will be given back to you. You may also need a duplicate set of car keys. It is very important to review the loan terms when getting approved for the loan. The last thing you want is a loan that you can't pay for. If this happens, your car will be repossessed and you will be out a lot of money. Also, beware of possible add-ons that could be factored into the loan. These can be service charges, maintenance charges, etc. These can also gain interest. All in all, make sure the loan fits into your budget nicely. If not, do not take it out.
The typical title loan will cost around twenty-five percent each month to finance. In other words, it will cost 300% every single year to finance! That is ridiculous. This is why you must do your due diligence beforehand. To put this in perspective, $1000 borrowed over the course of 30 days will run you at least $1,250 for that month. This doesn't even include additional add-ons.
As far as title loans are concerned, there are three methods that people use to pay them. The first method is in person. I would not recommend this method at all to anyone because of the fact that you could forget about it and miss a payment. I can't believe that you would forget about a loan of that magnitude but you might! In the end, you never know. The next method is an online payment. My favorite method of all would have to be recurring payments straight from your bank. This is where you set up an automated payment plan with your lender. Be aware that your lender cannot make these transactions from your bank account without approval. This would be illegal. Once this is all set up, your lender should give you an authorization copy for transferring these funds.
Ah, repossession! This is the worst thing of all that could happen with your title loan. You will lose your mobility to work, school, and many other places that require a vehicle to get there. This sucks because I am currently without a car and I understand the struggle. Not only will you lose your transportation but you will also lose the amount of money that you could have sold the car for. In other words, this becomes a sunk cost that cannot be retrieved. This is why it is very important to pay your car payment when it is due, especially under a title loan.
Like I said earlier, I would definitely not advise getting a title loan if you cannot afford one. You are putting your financial future at risk by doing this. The number one thing I would also recommend is buying a car cash. This way, you can't become underwater on your vehicle and owe your lender a ton of money. The worst thing that could happen is you total the car and you are out some money. You don't have to pay interest, you own it in full, and it doesn't depreciate as much if you buy a used one. What's not to like? This is what I have done and will continue to do moving forward. The other option I would recommend is taking out a loan from a bank or a credit union. This is still risky but your loan will have an extremely lower APR than your title loan. In the end, it is your money and your responsibility.
Car title loans can be great if you know what you are getting into. However, they can turn into a nightmare real quick. Be sure to visit Mount Pleasant Title Loans for great deals.
We are the best in the business when it comes to title loan. Get your title loan with us and you will get the largest loan at the lowest possible rate.
You can apply for a title loan entirely online. Our priority is making sure the entire process is quick and convenient for you.
If you have bad credit you can still get approved for a loan. There are no credit checks required to get approved.
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