Almost everyone in the United States takes out a loan of one kind or another at some point in their lives. In fact, the total amount of personal debt held by Americans has surpassed $16.8 trillion. In many cases, people take out loans for a house or a car or even just to make ends meet.
Depending on your specific situation, getting a fast cash title loan might be the right option. However, not everyone even considers this option because they have never gotten a title loan before. They wonder what a title loan is and what they have to do to get one.
A title loan can be one of the fastest ways to get money when you are facing a financial emergency. Although they are not the right choice for every situation, this article will help you understand if they might be the right choice for your situation. So what is a title loan, and what are the benefits of getting one?
Read on to learn all about the most vital things to know before you get a fast cash title loan!
What Is a Title Loan?
The first thing to know about title loans is that they are only available for people who own their own cars. If you are leasing your vehicle, then you do not possess the title. That means that you cannot use the title as collateral on a loan.
On the other hand, if you do own your own car, then you own a valuable asset. That asset can be used as collateral so that a potential lender can feel safe giving you a fast cash loan.
The exact amount you will get for your title loan depends on your car value. However, most title loans do not go higher than $10,000. In some situations, a title loan amount might only be a few hundred dollars.
How to Get a Title Loan
So how does getting a car title loan work? First, you will fill out an application with a title loan lender. They will need to verify that you own your vehicle.
That means you will need to show them your car, ID, proof of insurance, and the car title itself. If everything is in order, there is a good chance that the lender will then offer you a loan. But how much will you receive for your loan?
On the lower end, you might receive about 25% of the total value of your car. Of course, that will be based on the assessment of your car value by the lender. Even if you think your car is worth more, that does not mean that you can get more money for it.
However, some lenders will offer as much as 50% of the total value of your car as the loan amount.
Once you receive your funds, you will need to pay them back, usually within 30 days or even sooner. Of course, in exchange for taking out this loan, you will also need to pay back some interest.
Paying Back Your Title Loan
If you cannot pay back your title loan, then the lender may take possession of your vehicle. That is why you will need to leave your vehicle title with the lender.
However, some lenders will want further assurances that they will be able to take possession of your vehicle in the event that you do not pay back your title loan. For example, a lender might ask that you provide an additional car key so that they can pick up your car without needing to get the original key from you.
In some cases, a lender might even install a GPS tracking device on your vehicle. That way, they will be able to find it if the time comes for them to take possession of it.
However, some lenders also offer borrowers the opportunity to extend the time they have to pay back their title loan.
It is vital to understand that title loan interest amounts can be significant. Some people take comfort in the idea that they can keep putting off paying back their title loan.
However, this is a poor strategy except in the most dire financial emergencies. If you are not careful, you could end up losing possession of your vehicle. Even if you eventually pay back your loan, the longer you take to do so, the more interest you will have to pay back.
Benefits of Getting a Title Loan
Most people take out a title loan to help them get through an unexpected expense. Of course, there are other options for loans out there. However, one of the biggest advantages of title loans is that they are available to almost anyone who owns their own vehicle.
This can make title loans the only option for some people who may not be able to receive other kinds of loans.
For example, you might need to have a good credit score to take out a loan from another lender. If you don’t have a good credit score, it can be difficult to get loans from almost anywhere. However, even if you have poor credit, owning your own vehicle can make you eligible for taking out a title loan.
Another advantage of title loans is that they often provide the loan amount extremely quickly. Of course, this will depend on the lender that you choose. But many lenders will provide you with your title loan amount within a single day or even within an hour.
This can also make title loans a good option for people who need money especially fast.
Even if you have the credit or other means to apply for other loans, they might take longer to provide you with the loan amount. In an emergency, title loans can sometimes be the fastest way to get the funds that you need.
Some people hear about title loans and develop the misconception that they will have to leave their car with the lender. However, as we have discussed, you will still be able to use your car throughout the duration of your loan terms. It is only your vehicle title that you will need to leave with the lender.
Finding the Right Title Loan for You
Based on what we have discussed, you might have decided that a title loan is the best option for your situation. If that is the case, you will still need to decide where you will get your title loan.
There is a good chance that there will be many title loan providers near you who will be willing to loan you money. If you have never gone through the title loan process before, how are you supposed to know how to find the right lender for you?
Although some people are tempted to rush through selecting a title loan lender, finding the best loan terms can save you a lot of money. Choosing the wrong title loan lender can also make the process take longer than you hope.
Know Exactly What You Need
Before you start looking for title loan providers, take the time to sit down and think about exactly how much you need. The more you borrow, the more you will have to pay back. The interest fees on title loans can be high, so it is often wise to only borrow as much as you need.
Once you have calculated how much money you need to borrow, you will be ready to start looking for potential lenders.
Ask Around for Title Loan Recommendations
Do you know anyone who has received their own title loan at some point? If you do, there is a good chance that they have gone through their own process of selecting a quality title loan provider.
Consider reaching out to them and asking if they would recommend their own provider for your situation. If you are comfortable doing so, it can help to share with them how much money you are looking to borrow and anything else that might affect which lender would be the right choice for you.
You can also ask them about any title loan providers they might recommend you avoid.
Get a Car Title Loan From a Reputable Company
One of the fastest ways to make sure you are getting a title loan from a quality provider is by learning about the lending company’s reputation. One easy way to do this is to look at ratings and reviews online.
In fact, you can use the ratings of various title loan companies to help you speed through your selection process. If some of the loan provider options you are considering turn out to have terrible ratings, then you can save time by focusing your investigation on other companies with higher ratings.
You can also take the time to read through the written reviews for title loan providers. The reviews will provide much more detailed information that can help you get a sense of how satisfied other title loan borrowers are with a company you might be considering.
Shop Around for Interest Rates
One of the most important considerations for your title loan provider should be the interest rate that they provide for your title loan. Although there are other important considerations, the lower the interest rate offered to you, the better.
This goes double if you think there is any chance you might end up extending the terms of your loan. Interest payments can stack up fast, so it is best to find the lowest interest rates you can.
Understand Your Total Loan Repayment Costs
It is also essential to understand any other fees that might contribute to your total expenses when you pay back a car title loan.
Some people focus so much on low interest rates that they do not realize how significant other fees are.
When you are speaking with a representative at a title loan company, ask them about any other fees that might add to your total costs. When they finish answering, you can thank them and ask if there is anything else that might make your total costs even higher. If necessary, you can repeat this question until they assure you that you now know about everything that might affect the cost of paying back your title loan.
Keep in mind that some title loan providers will actually charge a fee if you pay back your loan sooner than required. If you think that you might pay back your loan ahead of schedule, then you will want to make sure that you borrow from a lender who does not apply an early repayment fee.
Make Sure Your Information Is Safe
In recent years, cybercrime has become more common.
Along with your vehicle information, you will be providing some sensitive personal information to your loan provider. As long as they take good care of your information, that should not be a problem.
However, you might want to ask about how a title loan provider you are considering takes care of the information of its borrowers. If they do not have any security protocols in place, then you might want to look for another loan provider who does.
Know the Most Vital Things to Get a Fast Cash Title Loan
When you are going through a difficult financial time, getting fast cash with a title loan can be the perfect solution. However, many people do not even consider getting a title loan because they do not understand how title loans work. The more you understand about title loans and the benefits they can provide, the easier it will be for you to decide if getting one is the right choice for your unique situation.
To learn more about how you can get a title or personal installment loan, reach out and get in touch with us here at any time!