An auto title loan can come in handy in times of need since you can use your vehicle title to get credit to address emergencies. The lender holds your auto title until you settle the debt, but you can still use your car during the repayment period. Like any other loan, you should arm yourself with several tips before the application. Below are three factors to consider when auto title loan application.
1. Loan Amount
The loan you are eligible for largely depends on your vehicle's value. Most loan companies give about 25% to 50% of the car value, which means people with deluxe vehicles can get a significant amount. However, you must fully own the vehicle to get this loan, which means it should be in your name. You also need to prove ownership by providing your ID, driver's license, or passport. Some lenders might also ask for your insurance certificate to confirm the details and car ownership.
You need to have fully paid for the vehicle or have positive equity before application. You might have to provide your bank records or other financial documents to prove your ability to pay in some cases. Therefore, it is crucial to work with a reliable lender to clarify every detail you need to understand before signing the agreement.
2. Service Fees
Nothing is as stressful as dealing with hidden fees and service charges. Hence, before choosing a lender, learn about the application fees, interest, processing fees, and penalties. In addition, you should read the loan terms carefully and understand every clause before you append your signature. This will help you get a clear idea of what you are getting yourself into and ensure you meet your obligations for a great experience.
3. Interest Rates
You don't want to be involved with car title loans that will cause stress to repay. For this reason, you should compare the interest rates of various lending institutions to choose one with friendly rates. Auto title loans are mostly repaid within a period of one to three months. Therefore, you should always work with a lender who charges low interest and has reasonable terms to avoid inconveniences.
These three critical factors can help you avoid making mistakes during auto title loans application. Take your time to find a reputable, licensed, and experienced lender. Go through their online reviews and feedback to assess their credibility before submitting your auto title loans application.Share