Car title loans give you an option for rapid approval on short-term loans, but, they are costly. For availing auto title loans, you have to pledge your car as collateral, and you have to hand over the car title to the lender till the time you repay the loan completely. If you do not have any other option and you need funds instantly for emergency reasons, then title loans definitely make sense. In order to borrow against your car, you should have adequate equity in your vehicle. In most cases, you have to pay off other loans used for buying the car.
The loan amount is dependent on the car’s value, like when the value of your car is higher, you will receive more cash. However, you will not get the full value of the car with title loans. Lenders want to make things simple to get back their amount so they only lend what they can easily and quickly receive. Most lenders provide loans between 25-50 percent of the value of your car. These days, plenty of car title loan lenders are available online. Search on the internet for the best car title loan lenders to get a good deal.
Car title loans are loans of short-term due within 15-30 days only. It means that you have to repay the fund quickly. In a few cases, you may extend the repayment period via rolling over it. Rather than paying off the loan, you may avail a new loan. Rolling over is very expensive, and you need to pay a loan fee whenever you borrow. The lending company charges 25 percent for a single month, but if you continue that loan for one complete year, then APR will be 300 percent. Costs are very high with car title loans. Lenders charge more interest rates compared to credit cards. It may lead to significant cost make you repay the loan many times.
Factors while selecting title loan lenders
When you search for the best car title loan lenders, you need to consider a few factors. Some of the considerations include document and processing fees, late fees, lien charges, finance fees, and interest rates. After you consider every aspect, you should opt for a title loan lending company. The best loan companies are the reputable ones who are into this business for a long time. The interest rate will be competitive, and they will have many borrowers.