Car title loans are an answer for those with bad credit looking to borrow money on their vehicle. With car title loans, there are five main things you should consider before getting the loan.
- Your Credit Score
- Torque (or the turning force applied to the wheels to get the car moving)
- The Length of Time You Keep Your Car Title Loan Open For
- APR Rate and Fees
- Tax and Insurance (T&I)
- Your Credit Score: If you have bad credit, your auto title loan application will be rejected. Your lender may decide to reject you based on this alone. You need to make sure that the lender has enough money to make the loan and that you can repay the loan as well as pay off your outstanding debts such as your mortgage. Before committing yourself to a loan, ask the lender about how he will use your credit score within his decision-making process.
- Torque: The axle must be capable of turning the wheels. If you don’t have enough torque, you won’t be able to make your car move. In a car title loan, you need to ensure that your lender can give the required amount of money before deciding whether or not to take out a loan with him.
Length of Time: You need to keep your auto title loan open for at least 30 days. Otherwise, the lender is likely to consider your loan default. A 10-day loan will not be considered as long-term debt for this reason.
- APR Rate and Fees: The APR rate is the interest rate you pay per day or per month on your auto title loan. You need to check exactly what you are paying when you make the decision on whether or not to choose this type of debt in order to avoid being charged exorbitant fees in addition to interest on the loan. It is a way of taking into account all of your monthly payments and comparing them against a standard annual interest rate. Your APR rate is based on how much risk the lender feels he has with making this type of vehicle title loan so his rates will fluctuate from month to month. The APR rate needs to be within the range of 9% to 18%. Lenders tend to charge higher interest rates to cover the risks they are taking on.
- Tax and Insurance (T&I) Some people are not aware that the cost of their auto title loan will include a tax, safety, and insurance fee. These fees are made up of a combination of points, fees, and insurance premiums that are supposed to cover the underwriting process. If you don’t pay for these insurance premiums upfront, you will have to pay for them later. This is especially true if you have not paid these premiums in full at least once every six months before getting your loan approved.
These are the five major things that you need to consider while looking for a car title loan. Though, if you make up your mind to get the loan, then you can consider getting the same from Same Day Title Loans.
Is a car title loan beneficial?
Car title loans are beneficial in several ways. While you are able to borrow cash, the lender is able to make a profit through the use of interest rates, which are extremely high. It is very important that you read all agreements before signing them in order to know exactly what you are getting into before taking out these types of loans. The lender can choose not to give you a loan based on your credit history or ask that you pay higher interest rates if your credit history is not good. It is also important to note that if your car needs repairs or has any damages whatsoever, the lender may choose not to give you a loan at all, even if your credit history is good. It is important that you read all agreements beforehand in order to avoid any of these situations from happening.
Generally, car title loans are a great way of borrowing money from a lender without having to pay off the amount on your credit card balance every month. However, you must be aware of the risks involved with getting a loan and the interest rates that may be charged to you accordingly.
How can car title loans help you with financial issues?
Car title loans can help you with your financial issues in several ways. For example, if you are looking to pay off your credit card bills or want to take a vacation but need the extra cash to do so, getting a car title loan may be the right choice for you. It is especially beneficial for those who have bad credit and are unable to get assistance from family or friends. Additionally, it is important to remember that you must keep your loan open for at least 30 days in order to avoid paying penalties on the loan itself. It is also not recommended that car title loans be repaid quickly as this can increase the interest rates charged on your loan by 20% or even more.