6 Mistakes To Avoid When Applying For A Car Title LoanFast Action Finance
For many people, car title loans provide the perfect opportunity to overcome a difficult and challenging financial situation. However, there are also a plethora of individuals who donâ€™t fully acknowledge what car title loan represents and how to use this financial tool to their best interests. If you are thinking of applying for a car title loan, make sure that you avoid making the following mistakes.
Opting for car title loans in a rush because you need money for gambling
The advantages of car title loans are numerous: one can obtain money in just a few hours, the funds loaned can reach up to $5,000 or even more in some cases, and everything is completely confidential and secure. However, some people use these advantages foolishly. This practical financial tool shouldnâ€™t be abused.
In other words, one shouldnâ€™t take advantage of car title loans just to make some money for gambling, drinking, and other bad spending habits. Obtaining money from car title loans should only be done when one needs money to fix the damaged roof of his property before the thunderstorms strike and similar urgent situations.
Picking the wrong private lender
Before applying for car title loans, it is a good idea to do your research and find out who the best private lenders are. Also, make sure that you check the market for ideas and have a minimal understanding about loans and how they work. Car title loans are not complicated financial tools, but it is best for you to know more about this before applying for them.
Borrowing too much money
Some clients have more than 1 vehicle which can be used for obtaining car title loans. In this case, it might be tempting to offer the ownership title of the most expensive and valuable car, to obtain the most money from car title loans. However, this might not be a good idea because in the end you will have to pay back more money and this is quite difficult. Instead, you should use the vehicle which can help you obtain exactly the money you need.
Not paying the loan on time
When obtaining money from car title loans, there is a certain timeframe specified in the contract which you should respect when it comes to paying back the loan. In most cases, you might need to pay back the loan in full in 30 days or less. Failing to comply with such terms will eventually lead to increased fees and additional expenses, meaning that you will pay much more money than previously established.
Therefore, when applying for car title loans, make sure that you are 100% sure that you can pay the money back on time. It would be a good idea to secure 2 or more revenue sources during this timeframe, to be absolutely sure that you donâ€™t exceed the due date. Obtaining money from car title loans is really helpful and practical, but this financial tool can backfire if you donâ€™t use it properly.
Not reading the contract carefully
Many people who apply for car title loans skim the contracts before signing and this can be a really bad idea. It is very important to read the contract carefully, not only when applying for car title loans, but whenever you have to sign something. The contract species exactly when you should pay the money back, how much you should pay, what are the consequences of exceeding the due date, and other clauses. If you are not aware of the contents of the contract when you sign, this can have bad repercussions for you later on.
Renewing the contract too many times
In those moments when clients do exceed the due date and they donâ€™t pay the money on time, the contract can be prolonged for another 30 days if it is necessary. However, the interest rate of the loan will be increased. Unfortunately, many people are not aware of this and they end up renewing their contracts again and again. This is not a good idea as at the end of the contract, you will eventually pay back much more money than you previously borrowed.
These aspects are presented to you so that you donâ€™t make costly mistakes you might regret afterwards. However, you shouldnâ€™t be discouraged from applying for car title loans if you need a quick sum of money. Such loans provide one of the most flexible and efficient financial tools you have at your disposal. Although you might be able to borrow from other sources like a commercial bank, you might not obtain the money in just a few hours and the bank will definitely check your financial history before approving the loan. Similarly, if you borrow from someone else, you have to give long and credible explanations.
Feel free to contact us if you need a substantial sum of cash in Toronto right away. We can make arrangements so that you have your required money in your hands in one business day or less.