With a car title loan, you hand off your car title to the lender as collateral. Once you finish paying off the loan, you can have the car title back. When you default on your loan, the lender will keep your vehicle. Learn how you can make the most out of a car title loan.
Beware of Dishonest Lenders
Car title loans are among the fastest ways to borrow money. Unfortunately, some lenders have been short-changing their clients. They present agreements for their clients to sign that indicate they can keep the vehicle regardless of the value of the loan compared to the car equity. Avoid being a victim of this practice by working only with a reputable financing company.
Find the Trustworthy Ones
These unfair car title agreements have pushed the Consumer Financial Protection Bureau to tighten regulations for car title loans. You may be hesitant to take out a loan now, but once you do, you will enjoy all the benefits. You only need to find a lender that you can trust and will provide a clear and honest loan agreement.
Choose Your Payment Options
Once you find a trustworthy lender, you can get the best deal out there. Know how long you will need to repay the loan. Utah Money Center points out that the length may vary depending on the lender, but title loans usually have repayment duration of 30 days. Having only 30 days to repay the loan may be daunting, but it may be easier for you in the long run, as you don’t have to pay more interest.
Know Model and Mileage Restrictions
You can also get a better deal if you know what types of cars the lender accepts. Lenders can have restrictions regarding the model of the car or even the mileage. Before you sign the agreement, check if the lender you’re working with has any restrictions.
Car title loans are growing in popularity despite recent issues with less than honest lenders. The good news is you can still find honest and reliable financing companies. You just need to do your research and be extra careful when choosing a loan provider.