Bank loans and borrowing money has become a significant factor to the majority of Americans. Whether an individual needs a loan to start a business, go to school, settle minor or major personal issues, or just requires a personal loan, acquiring a loan may seem difficult and frustrating. Consequently, a vast majority of individuals have turned their attention to acquiring car title loans. They often require significantly less rigorous procedures to acquire, and can be fast and easy to acquire, ultimately increasing their borrowing potential. A car title loan is a type of secured loan where recipients are able to utilize their car title as collateral for the required loan. These potential borrowers temporarily submit the ownership of their vehicle to the lender until the loan is repaid. Although these loans may appeal to numerous individuals, there are a number of significant factors to consider when applying for a car title loan. Below are the best tips for acquiring the best deal when getting a car title loan.
Ensure comprehension of the the online application and approval undertaking:
The majority of car loan lenders will have the complete process completed entirely online. Other lenders may require more verification such as a phone call directly with the lender for identity verification purposes. The online application process can range anywhere from twenty minutes to a few hours depending on the lender and the borrower’s circumstances. Online applications are generally much easier and convenient for the potential borrower due to the efficiency of the approval process. Some of the requirements associated with the application process include the vehicle’s details and title status, the name, address and phone number of the recipients, confirmation of the recipient’s residence and income status as well as some additional references. Furthermore, many lenders often require a visual inspection of the vehicle being used as collateral. This is accomplished during the borrower’s arrival to the lending office where they will pick up their loan amount check.
Know what type of vehicles the lender accepts:
Although the majority of lenders solely accept vehicles manufactured in the year 2000 or newer, some lenders will accept vehicles as old as 1995 models. Almost always, a vehicle’s odometer reading, or mileage, will have a significant impact on the loan amount, interest percentage and ultimately the approval. If the vehicle of a potential borrower has over 100,000 miles on the odometer, the recipient should find out whether the lender has mileage restrictions for the loan approval process. It is best advised to inquire about this before filling out any applications or loan forms.
Be knowledgeable of whether there are any penalties for prepayment:
As contradicting as it sounds, many lenders may actually penalize the borrower in the form of a predetermined fee if the recipient were to pay off the loan too early.. If a recipient obtains a car title loan with terms longer than 30 days, it is very likely that they will incur a prepayment fee associated with the loan. This results from lenders seeking to optimize their profit when lending individuals loans. They often design their loan packages in an attempt to earn as much profit on the interest payments as possible. Paying off a loan too early indicates that the borrower is saving money in interest payments, while directly reducing the profits for a lender. Borrowers should also be aware of their payment options. Similar to a conventional bank loan, a longer loan term generally indicates a lower monthly payment.
Ensure that the lender has authority and a license to operate in your state:
There are stringent regulations that determine the requirements eligibility for lenders to operate in specific states of the United States, varying from state to state. States that do not authorize car title loans are unable to offer a recipient a legal loan.
Although these loan types are extremely renowned, nearly half of the states in the United States do not have a license to operate and lend money in the form of a car loan. One of the most popular states to acquire this type of loan is Florida. With one of the lowest annual percentage rate, or APR, car title loans florida incur only a 30% APR which is extremely generous compared to the fixed 300% loan APR in Mississippi.
Ensure whether you will still be able to operate and drive the vehicle during the loan term:
Although the majority of lenders will allow the recipient to keep the vehicle and operate it regularly, some lending organizations may elect to keep the borrower’s vehicle until the loan is paid off. Furthermore, those lenders that allow the recipient to keep their vehicle during the life of the loan will likely install a tracking device on the vehicle in order to track the car’s movements. It is generally advised that unless the recipient has another form of transportation, such as another vehicle, that they only accept loans were they will be allowed to keep their vehicles.