Taking out an auto title loan is a good way to get some quick cash when you really need it, especially if you have a flawed credit history. Most applicants qualify without a credit check, and the only collateral necessary is your car. However, vehicle title loans typically come with a higher rate of interest than some other kinds of financing. Once you get your cash, if you cannot keep up with your loan payments, you could lose your ride. Protect yourself and your property by avoiding the following mistakes when you apply for an auto title loan.
1. Forging Ahead Too Fast
Don’t let the pressing need for funds get you into a sticky situation. Before you sign on for a title loan, make sure you understand all the terms and have a solid plan for repayment.
2. Settling for an Unfavorable Deal
If you are like most people, your car is an absolute necessity for getting to work, meeting daily responsibilities and maintaining a social life. When you agree to a deal with payments you can’t afford, you risk losing your car. Keep shopping until you find a title loan you can live with.
3. Skipping the Fine Print
Don’t let the lender rush you through the closing process. You will be the responsible party in this transaction, so start right away and read the fine print. Ask questions if anything is unclear.
4. Skipping the Research
Information is your most important tool, so take some time to learn about auto title financing before you set foot on a lender’s turf. Know how to tell the difference between a predatory lender – one who takes advantage of your situation – and a lender who is simply competitive in the industry.
5. Underestimating the Cost of Risk
Lenders take substantial risks when extending loans without checking clients’ credit histories. They have to charge finance fees that balance the risk they take. Therefore, the interest you pay on your loan is higher than that of conventional financing. You won’t find a low-cost auto title loan, but you can compare lenders to find a loan that is fair.
If an auto title loan sounds right for you, give us a call at 1-800-910-6758 or click here to start your online application.