With hundreds of car title loan lenders, getting a loan is now easier than ever.
However, with so many options comes the responsibility of ensuring that you get the best loan deals in the market. Getting a loan is a crucial financial decision, and the following tips will guide you to getting the best car title loan deal.
1. Consider the lender’s reputation
As a non-traditional loan lending option, car title lending has grown exponentially with the internet-related technology advancement.
Unfortunately, the internet is full of fraudsters posing as lenders, and you should be wary of such companies. Conduct research on various lenders in your region. If possible, seek referrals from your friends and family members. A company that has been around for some time is an ideal choice as they have proof of trust and service delivery.
Since most of these processes will be done online, you have to opt for a lender that protects your information. With the rise in cybersecurity, your bank details and personal data can be easily used against you. Be wary of companies without proper security infrastructure.
Lastly, is your lender legal? Like any other loan product, a car title loan is protected by legal statutes that require any lender to be registered by the state government. Registration weeds out fraudsters. Remember, making a deal knowingly with an unregistered loan service can earn you several years behind bars.
2. What are you offering?
Most lenders are specific on what cars they accept. Some lenders accept models ranging back into the late 90s, while others only receive the latest models.
You should establish whether the lender has any mileage restrictions before starting the paperwork. Some companies will have mileage limits of 50k or 100k, something that can affect the terms of your loan deal.
Another vital thing to consider is your car’s condition. If your vehicle is damaged, can you get a title loan on a salvage title? Most lenders can still finance salvage vehicles under different terms as they carry a higher risk of breaking down.
3. Look for straightforward requirements
Getting a loan has never been an easy process. With a load of paperwork to be filled and legal protocols to be followed, the entire process might appear longer than you expected. However, the digital nature of car title loans gives it an advantage over traditional loaning processes, being both faster and more convenient.
However, that isn’t always the case. Some companies have come up with complex lending processes whose aim is to lure customers into agreeing to their terms and conditions without fully understanding them. You must be on the lookout for such firms.
Ask your lender to stipulate what they require from your end, and their loan terms and conditions should not carry any hidden fees. Additionally, this is the best time to find out their payment options.
4. Get the best repayment options
A car title loan has to be repaid if you are going to get your car back. You have to find a lender that offers the best loan repayment options, as loan repayment is never an easy task.
Find out what interest rates the firm offers alongside their repayment options. Do they take one-time repayment, or you must settle your loan in installments? Do you get to drive your car, or do they hold it as a guarantee?
Top lenders allow you to customize your repayment options to suit your financial charts. It is wise to avoid lenders with hidden repayment charges such as early repayments penalties or fixed-period repayment.
A lending firm should not have a problem if you repay a 12-month loan in 10 months, but most do. Remember, lenders make profits through interest, and paying your loan earlier doesn’t give them the satisfaction. Nonetheless, you have the power to negotiate favorable terms. Lastly, what payment options do they accept? Will they go after your paycheck or accept direct payment?
5. Have a plan to get your car back
Some lenders take custody of your vehicle as a guarantee after giving you a loan.
In such cases, you risk losing your car entirely if you fail to settle the loan as per the agreement. You need to have a solid loan repayment plan before taking one. The following tips will help you get your car back on time:
a). Repay your debt early
You can settle your debt as early as possible if your lender accepts early repayments. This is the time to consider taking a side job or talking to a family member to lend you money for a short period.
b). Renegotiate your loan terms
Sometimes you might need your car for work purposes, and it doesn’t hurt to try and renegotiate with your lender and convince them to let you keep your vehicle as you work on repaying the loan. The chances are that your proposal will be rejected, but it is worth giving it a try.
c). Refinance loan
A car title loan will slightly improve your credits and can give you qualifications for a refinance loan. You can take a refinance loan and use it to settle your title loan and get back your car. Refinance loans have lower rates and reduced fees.
d). Talk to a debt manager
If you feel your debt situation is getting out of hand, you can talk to a debt management agency and enroll in a debt management program. Debt management will help you settle your debts without damaging your credit.
Car titles have little impact on your credit, as the loan operates outside the traditional financing ecosystem bound to credit bureaus. Nonetheless, you will incur extravagant penalty fees and risk car repossession if you fall behind on your loans.
Endnote: How to Get The Best Deal on Car Title Loans
Online lending platforms such as car title lenders have revolutionized the finance sector. However, with new technology comes new challenges and responsibilities.
You should be extra vigilant when applying for a car title loan. The above tips will help you get the best car title loan.
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