Tips to Find the Best Vehicle Title Loan

We sometimes find ourselves in a situation where we urgently need cash to pay our mounting bills or start or expand our business. When any such emergency arises, people look for the best loan options. However, we all know how difficult it can be to access loans, as numerous obstacles stand in our way. Apart from these complexities, you may find that it is also costly, and the payment terms could be unfavorable.

Considering all such difficulties, you might consider getting a car title loan. A title loan is where your car’s title is used as collateral. A car title loan is a secured loan that needs your valid ID card and a car title as the security for the loan, and the process is not demanding, which makes this type of loan a favorite among many borrowers.

However, it is important to find a reliable company to prevent any future trouble. The lender must be licensed and registered to operate in your region, and you need to check for the regulations applicable in your state. Therefore, to ensure you have the best deal on a car title loan, we have listed the three most useful tips to remember.

1. Look for the minimum interest rate

One of the most important considerations is to understand the interest rate system. You need to find a company that offers the lowest possible interest rate. Ensure the company is quoting a monthly or annual percentage rate (APR). Although, per regulations, lenders are required to quote APR, title lenders do not always do so. If the lender gives you the monthly rate, use your mathematics knowledge to calculate your APR. For instance, a title loan of $1,000 with an interest rate of 25 percent per month, which you keep for a year, will cost you $4,000.

2. Check fees and other add-ons in the contract

Apart from charging exorbitant interest rates, your title lender may also charge additional fees. You may also be asked to have special insurance coverage, life insurance, or roadside assistance. Check out what fees are charged in your title loan contract, like the origination fees, lien fees, processing fees, document fees, title fees, and late fees. In worst cases, the company may illegally charge you a car repossession fee. Therefore, read your contract carefully and know what fees are being charged.

3. Find out if your lender charges a prepayment penalty

Another important thing is to check if there is any prepayment or early repayment penalty. This happens when you have money and want to repay the loan three months early to save yourself a thousand dollars of interest. However, this is not profitable for the company, and they may charge you a thousand bucks as a penalty for early repayment. Although reputed online title loans firm does not charge a prepayment penalty for early payoff, some unprincipled ones do. Therefore, before you sisigningontract, check that torch penalty.