The economy is in bad shape. Inflation is high which means the cost of goods will go up. Many Americans are having a hard time making ends meet.
If you’re facing financial hardships, you might need to take out a loan. A popular solution is to get a car title loan.
Before you decide to apply for one, there are several things you should know. Read on to learn what you need to know before getting a car title loan.
Qualifying for a Car Title Loan
The first thing you need to know is if you qualify for a car title loan. To qualify, you’ll need to own a car. This means having a lien-free auto title that lists you as the owner.
On top of a clear title, your car should have at least some equity. You’ll need to have a valid ID or driver’s license. Having proof of insurance is a must.
If you get approved for a loan, you’ll have to give your car title to the lender. You can continue to drive your car as you repay the loan. You get the title back once you repay the loan in full.
Credit Score
One of the advantages of getting a title loan is that you don’t need to have a high credit score. Your credit score plays no role in getting approved.
A lender will not ask you for your credit score. Keep in mind that your car will serve as collateral. If you don’t repay the loan, the lender will see the car to the highest bidder and still make money.
High Fees and Interest Rates
A title loan may come with high-interest rates and fees. The APR for the title loan can be an average of 300%. That’s much higher than most credit cards.
You might find yourself paying way more than what you borrowed in fees and interest alone. If you plan to apply for a car title loan, make sure to get the APR and total cost of the loan in writing.
Benefits of Car Title Loans
This type of loan offers some flexibility. You can choose how much money you want to borrow. Most lenders allow you to repay the loan with cash, a cashier’s check, or a money order.
You can get cash in your hands within less than 30 minutes if you get approved. This is helpful if you’re in a pinch.
To get more information about car title loans, click the link to read a useful guide. Use it to determine if a car title loan is right for you.
Getting a Car Title Loan
Before getting a car title loan, you need to consider these factors. Getting a car title loan might be a good idea if you need cash in a hurry. Do make sure that you get good terms so you can repay the loan. Continue to explore the rest of our blog so you can read more great articles.
