Car title loans are mainly marketed as the payday loans. These are available faster than the other loan types and come in handy during emergencies. So, the car title loans are the short term loans which you can obtain against the title to your car. That means, when you are taking out a car title loan, you are actually pledging your car to the lender. Therefore, these loans are different than the payday loans as in the case of the later, you aren’t required to keep any of your assets as the collateral. The car title loans are also different from the auto loans as it may not be easy for you to borrow money too very easily through the conventional processes.
Having a proper knowledge on the loan is important
Before you obtain a car title loan, it would be important for you to have a proper understanding of the loan type. As these loans are available fast and to almost everyone unlike the traditional car or auto loans, the interest rate is quite high. Therefore, it is quite costly to obtain one such loan.
Understanding the loan type:
Title loans do not come for cheap. The lenders in case of the car title loans tend to charge higher rate of interest in comparison to the bank loans, credit cards, and sometimes even in comparison to the payday loans. You are getting quick cash unlike any of the other loan types. So, it comes at quite a high cost.
Even if the due amount on the loan may not be high, the interest rate and mainly the APR can go even as high as that of 100%. Therefore, it would be important for you to consider these facts before obtaining a loan. You will be able to plan accordingly and decide if it would at all be possible for you to make the payments on the loan.
Here’s an example for your better understanding:
- If you are planning to borrow $1,000 and for a term of 30 days
- Your monthly fee is going to be 25%
- Then you will pay $1,000 x 25% = $250
- After the term expires, the total amount you will be owing is $1,250
Taking out a car title loan:
In order to take out a car title loan, you will be required to:
The first step involves:-
1. Shop for some title loan offers
2. Show your application to the lender
3. You will be required to show your car
4. You will have to provide the title to the car
5. You will be required to provide your photo ID
6. Some lenders may even ask you to provide an extra copy of the car keys
2. Show your application to the lender
3. You will be required to show your car
4. You will have to provide the title to the car
5. You will be required to provide your photo ID
6. Some lenders may even ask you to provide an extra copy of the car keys
The second step involves
The actual money lending procedure where the lender after the approval of your loan, provides you with the money
The third step involves
After the 30 days term comes to an end, you will have to pay back the borrowed amount along with the monthly fee to the lender
So, this is what a car title loan is all about and you can take out one only if you think you can afford to pay it back.
For more related information visit: AutomotiveInternetSales.com
Comments